Oil prices were roughly unchanged on Monday as investors expected tighter supplies from OPEC+ producers from May, weighing on concerns about weakening global growth that could dampen fuel demand.
Brent crude futures slipped 7 cents to $85.05 a barrel by 0630 GMT, while West Texas Intermediate crude (WTI) was at $80.67 a barrel, down 3 cents.
After OPEC and its allies surprised investors by announcing production cuts to begin in May, both contracts rose for the third consecutive week last week, returning to levels seen in November.
The group, known as OPEC+, will cut off mostly sour crude oil supplies from Middle Eastern producers led by Saudi Arabia.
Following the announcement, the world’s largest oil exporter raised May crude prices for customers in Asia and the United States. State oil giant Saudi Aramco has also informed several Asian customers that they will receive full contract volumes in May despite the production cut.
Separately, investors are watching the progress of negotiations between Iraq and Kurdistan to restart northern oil exports, which could bring more sour crude oil to the global market.
The number of US oil rigs supporting prices dropped two to 590 last week, while the number of gas rigs dropped two to 158, Baker Hughes Co. reported on Thursday.
In global financial markets, the release of the closely watched US inflation report this week will help investors gauge the short-term course of interest rates.
Analysts said borrowing costs could still rise if inflation remains strong, despite expectations that the Federal Reserve may slow rate hikes due to the recent banking crisis.
This week’s US data if substantial numbers reinforce expectations of the Fed continuing on its tightening path, while weak numbers point to economic pain, which means, either way, risk-aversion grows and there could be a drag on sentiment.
Sharp rate hikes have boosted the dollar and made dollar-denominated commodities like oil more expensive for investors holding other currencies.
