Picture: REUTERS
Picture: REUTERS

London — Oil prices, which have been driven higher for the past four weeks, were steady on Monday, with holidays in Singapore, London and New York dampening trade, as rising concerns over demand recovery offset supply cuts.

Brent had eased by five US cents, or 0.14% to $35.08 a barrel by 10.14am GMT, while US oil gained 14c, or 0.42% to $33.39 a barrel. Both are down about 45% so far this year.

“Uncertainty around the current travel patterns in the US is so great that the American Automobile Association did not release its Memorial Day travel forecast,” Bjornar Tonhaugen, head of oil markets at Rystad Energy, said.

Rising tension between the US and China, the world's largest oil consumers, over moves by Beijing to impose security legislation on Hong Kong also fuelled concerns about the outlook for demand.

Relations between Washington and Beijing have soured since the coronavirus outbreak, with the two countries already at odds over Hong Kong, human rights, trade and US support for Chinese-claimed Taiwan.

Prices are finding support from global supply cuts with Opec and its allies, known as Opec+, now nearly a month into a deal to voluntarily withhold 9.7-million barrelssper day of production.

And the US rig count, an early indicator of future output, fell by 21 to a record low 318 in the week to May 22, data from energy services firm Baker Hughes showed.

“The huge decline in global oil production has doubtless been the key factor in the latest surge in oil prices,” Commerzbank said.

Reuters