Brent futures for April delivery rose 22 cents, or 0.3%, to $86.61 a barrel, while U.S. crude rose 42 cents, or 0.5%, to $80.14 per barrel gain. "The fundamental backdrop for oil is still very strong," said Phil Flynn, analyst at Price Futures Group. "With China reopening, we will see more demand and Russia and OPEC has the same or less supply, which is bullish." Oil prices rose on Friday to their highest in two weeks 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 imposed on its exports in response to the Ukraine conflict. The United Arab Emirates' energy minister said there was no need for the OPEC+ group of oil-producing nations to meet earlier than scheduled as the market was balanced.
Both the Brent and WTI contracts rose more than 8% last week, buoyed by optimism over demand recovery in China after COVID curbs were scrapped in December.
U.S. main stock indexes also rose on Monday. The U.S. Federal Reserve has been raising interest rates to rein in inflation, leading to concerns the move would slow economic activity and demand for oil.
"It is difficult to overstate the importance of this single data point, as traders and the Fed look for confirmation of the gradual downward trend of the past few months," said Matthew Ryan, head of market strategy at financial services firm Ebury. Additionally, supply concerns were relieved somewhat as a cargo of Azeri crude set sail from Turkey's Ceyhan port on Monday, the first since a devastating earthquake in the region on Feb. 6. Ceyhan is the storage and loading point for pipelines that carry oil from Azerbaijan and Iraq. Also on the supply side, U.S. shale crude oil production in the seven biggest shale basins is expected to rise to its highest on record in March, the Energy Information Administration said on Monday. (Reporting by Noah Browning Additional reporting by Florence Tan in Singapore and Emily Chow in Kuala Lumpur Editing by Kirsten Donovan, Mark Potter, David Gregorio and Deepa Babington)
