Oil. Picture: REUTERS
Oil. Picture: REUTERS

Singapore — Oil prices eased on Monday as traders took profit ahead of fresh European and US economic data, despite hopes for some resolution to the US-China trade row that has hurt global economic growth and crimped energy demand.

Prices jumped about $2 a barrel on Friday after the world’s top two economies said they had made progress on trade talks while US officials said the deal could be signed this month.

Brent crude futures for January fell 31c to $61.38 a barrel by 6.06am, while December US crude futures was at $55.91 a barrel, down 29c.

“Friday’s mega-rally was built on a combination of not-as-bad-as-feared data and optimism on a trade deal that really, only keeps the lights on. It does not increase the brightness of the world economy,” Jeffrey Halley, a Singapore-based senior market analyst for Asia Pacific at Oanda, wrote in a note.

“With plenty of oil going around for everyone from everywhere, oil, in particular, will be more susceptible to headline bombs this week.”

The EU and the US are set to announce manufacturing data on Monday with more US and Chinese data to come later in the week.

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“I think the trade talk continues to improve sentiment but … Asian oil traders want more convincing data from the macros side” before supporting oil, Stephen Innes, Asia Pacific market strategist at AxiTrader, said.

Still, a fall in the US rig count for a second consecutive week and an upbeat US jobs report supported oil prices last week. Independent producers cut spending after record production weighed on the outlook for energy prices.

Also underpinning US crude prices was a shutdown of the Keystone pipeline that sends Canadian heavy crude to the US. Owner TC Energy said on Friday work is under way to plug the pipeline in North Dakota.

Production cuts by oil cartel Opec, Russia and other producers — a group known as Opec+ — since January to reduce oil output by 1.2-million barrels per day are also propping up prices.

Still, Russia again missed its output cut target in October, energy ministry data showed on Saturday.

Opec’s output recovered in October from an eight-year low after a rapid rebound in Saudi Arabia’s production from attacks on its oil infrastructure in September offset losses in Ecuador and voluntary cuts under the pact.

Protests at Iraq’s main Gulf port Umm Qasr on Saturday blocked the country’s food imports but did not affect the second-largest Opec producer’s oil exports, which take place mostly from nearby offshore platforms.

Saudi Aramco finally kick-started its initial public offering (IPO) on Sunday, but offered scant details on the number of shares to be sold, pricing or the date for a launch.