BD Forex- NEW YORK (Reuters) – Crude oil prices slipped on Monday in subdued trading after a long holiday weekend following three straight weeks of gains, but strong economic growth in China and a weaker dollar limited losses.
Strong March investment, retail sales and exports all suggested China, the world’s No. 2 oil consumer, may carry solid economic momentum into spring.
Benchmark Brent crude futures were down 18 cents at $55.71 at 11:37 a.m. EDT while U.S. West Texas Intermediate (WTI) crude futures were down 23 cents at $52.95 a barrel.
Volumes were thin with just over 103,000 Brent futures contracts and about 183,000 WTI contracts changing hands, nearly 70 percent lower than Thursday’s volumes.
With financial markets closed across Europe, the focus was on geopolitical tensions.
“The biggest issues right now are going to be geopolitical in nature,” said Mark Watkins, regional investment strategist at the Private Client Group at U.S. Bank in Park City, Utah.
“Right now all eyes are on the Korean peninsula and that may cause a little instability with the markets as a whole … between now and the OPEC meeting, that will be the number one thing to watch”
U.S. Vice President Mike Pence on Monday warned North Korea that U.S. strikes in Afghanistan and Syria, one of North Korea’s few close allies, showed that the country should not test the resolve of President Donald Trump.
The dollar slipped to a five-month low against the yen as tensions with North Korea stoked demand for the safe-haven Japanese currency.
Fighting in Libya has cut oil output, but state oil company NOC has reopened at least one field.
Increasing U.S. crude output has undermined efforts by the Organization of the Petroleum Exporting Countries and other producers to curb output and reduce a glut that has depressed prices.
“All the signs of an ever-growing bull market are starting to fade away, (with) Libya and geo-political tensions easing, but also because the Texans are back and they are pumping like there’s no tomorrow,” said Matt Stanley, a fuel broker at Freight Investor Services (FIS) in Dubai. “If I were OPEC, I’d be pretty worried.”
OPEC meets on May 25 to consider extending the cuts beyond June. Iran fed hopes that OPEC and non-OPEC producers would extend the cuts, but Saudi Arabia’s energy minister said it was too early to discuss an extension.
U.S. drillers last week added rigs for a 13th straight week. Investors are pouring money into the industry.
