An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS
An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS

Tokyo — After strong gains last week, oil prices were slightly lower on Monday as data released in China reinforced signs that its economy is slowing, though progress in China-US trade talks has supported prices.

Brent crude was down 12c, or 0.2%, at $61.90 a barrel by 6.09am SA time, having gained more than 4% last week, its best weekly gain since September 20.

West Texas Intermediate (WTI) crude futures were down 16c (0.3%), at $56.50 a barrel, after rising more than 5% last week, also the biggest weekly increase since September 20.

Profits at Chinese industrial companies fell for the second consecutive month in September as producer prices continued sliding, highlighting the toll a slowing economy and protracted US trade war are having on corporate balance sheets.

“There have been some small profit-taking sells on the weak China data released on Sunday and unwinding of weekend hedges,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.

“But the market remains well supported on the dip,” he added, pointing to signs of progress in China-US trade talks.

The two sides issued a statement on Friday saying they are close to finalising some parts of a trade agreement.

US energy companies also reduced the number of oil rigs operating this week, leading to a record 11-month decline as producers follow through on plans to cut spending on new drilling.

Russia’s energy ministry said on Friday it is continuing close co-operation with Saudi Arabia, the oil cartel Opec and non-Opec oil producers to enhance market stability and predictability.

The statement came a day after Igor Sechin, CEO of Russian oil producer Rosneft, said the September attacks on Saudi oil assets created doubts over its reliability as a supplier. The attacks temporarily shut down about half of the kingdom’s oil output.

Opec+, an alliance of Opec members and other major producers including Russia, has since January implemented a deal to cut output by 1.2-million bpd to support the market.

The pact runs to March 2020 and the producers meet to review policy on December 5-6.

Elsewhere, a suggestion by US President Donald Trump that ExxonMobil or another US oil company could operate Syrian oilfields drew rebukes from legal and energy experts.

Money managers cut their net long US crude futures and options positions in the week to October 22, the US Commodity Futures Trading Commission said on Friday.

Reuters