By Florence Tan
SINGAPORE, Feb 13 (Reuters) - Oil prices eased on Monday
after rising 2% in the previous session as investors shrugged
off the impact of Russian output cuts, instead focusing on
short-term demand concerns stemming from refinery maintenance in
Asia and the United States.
Prices rose on Friday after Russia, the world's third
largest oil producer, said it would cut crude production in
March by 500,000 barrels per day (bpd), or about 5% of output,
in retaliation against western curbs on its exports that were
imposed in response to the Ukraine conflict.
Brent crude futures fell 69 cents, or 0.8%, to
$85.70 a barrel by 0153 GMT after a 2.2% gain on Friday. U.S.
West Texas Intermediate crude was at $79.04 a barrel,
down 68 cents, or 0.9%, after rising 2.1% in the previous
session.
"The weakness that we are seeing in prices in early morning
trading today likely reflects the market coming to the
realisation that these cuts are already largely priced in," ING
analyst Warren Patterson said in a note.
Both contracts rose more than 8% last week, buoyed by
optimism over demand recovery in China, the world's top crude
importer and No. 2 oil consumer, after COVID curbs were scrapped
in December.
China's oil demand recovery is curbing its gasoline exports
in February although its refiners are maintaining diesel
shipments at above 2 million tonnes.
Stefano Grasso, a senior portfolio manager at 8VantEdge in
Singapore, said the 500,000 bpd cut would bring Russia back in
line with its OPEC+ quota as Moscow is currently over exporting.
The Organization of the Petroleum Exporting Countries (OPEC)
and their allies including Russia, a group known as OPEC+, in
October agreed to cut production by 2 million bpd, about 2% of
world demand.
Oil prices may resume their rally back to $100 a barrel
later this year on China's demand recovery and limited supply
growth due to a lack of investment, OPEC country officials told
Reuters.
In the United States, the world's biggest oil producer, the
number of operating oil rigs rose by 10 to 609 last week, the
largest weekly addition since June, according to Baker Hughes
report on Friday.
(Reporting by Florence Tan; Editing by Christian Schmollinger)
florence.tan.thomsonreuters.com@reuters.net))
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