LONDON: Oil prices edged lower on Monday after fresh Saudi and Russian crude output cuts had driven prices to 10-month highs last week.
Saudi Arabia and Russia last week announced that they will extend voluntary supply cuts of a combined 1.3 million barrels per day (bpd) until the end of the year.
Brent crude fell by 23 cents, or 0.25%, to $90.42 a barrel by 1051 GMT on Monday while U.S. West Texas Intermediate crude lost 46 cents, or 0.53%, to $87.05.
The supply cuts overshadowed continuing concern over Chinese economic activity last week, but investors looked to be focusing on demand drivers on Monday, with the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) due to release monthly reports this week.
The IEA last month lowered its 2024 forecast for oil demand growth to 1 million bpd, citing lacklustre macroeconomic conditions. OPEC’s August report, meanwhile, kept its 2.25 million bpd demand growth forecast unchanged.
Oil prices rise to 9-month high
Among economic factors in the spotlight, the European Central Bank (ECB) is due to announce its monthly interest rate decision this week.
The euro zone is forecast to grow more slowly than previously expected in 2023 and 2024, the European Commission said on Monday, held back by a sluggish German economy. It is now projecting GDP growth of 0.8% this year for the zone’s five largest economies, down from the 1.1% forecast in May.
In the United States, meanwhile, August consumer price index (CPI) data is due on Wednesday and could provide a steer on whether more increases to interest rates will be on the cards.
“The key economic number for the US this week will be US inflation data, which is likely to influence everything from stocks to forex to fixed income and commodity prices,” said Naeem Aslam of Zaye Capital Markets.
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