(Corrects ranking of world's top crude importers in last
paragraph)
By Florence Tan
SINGAPORE, May 15 (Reuters) - Oil prices slipped on
Monday as concerns about fuel demand at top global oil consumers
U.S. and China offset optimism about tightening supplies from
any OPEC+ cuts and a resumption in U.S. buying for reserves.
Brent crude futures fell 43 cents, or 0.6%, to
$73.74 a barrel by 0130 GMT while U.S. West Texas Intermediate
crude was at $69.67 a barrel, down 37 cents, or 0.5%.
Last week, both benchmarks fell for a fourth consecutive
week, the longest streak of weekly declines since September
2022, over concern that the United States could enter a
recession on "significant risk" of a historic default within the
first two weeks of June.
Investors sought safe havens such as the U.S. dollar,
strengthening the currency which makes dollar-denominated
commodities more expensive for holders of other currencies. "Oil prices are still under pressure on sluggish demand
outlooks as China’s economic reopening progress seems bumpy,"
CMC Markets analyst Tina Teng said, adding that the U.S. banking
rout has also caused market jitters.
Investors will scour China's slew of economic data on
industrial output, fixed assets investment, and retail sales in
the week ahead for signs of oil demand improvement, she added.
"With the uneven re-opening in China and concerns that the
U.S is facing a growth slowdown at a time when the X-date for
the debt ceiling is rapidly approaching, topped off by a rally
in the U.S dollar, market sentiment towards crude oil will
remain tepid at best," IG analyst Tony Sycamore said.
Still, global crude supplies could tighten in the second
half as OPEC+, the Organization of the Petroleum Exporting
Countries and their allies including Russia, are making
additional output cuts that is reducing sour crude availability.
The group announced in April that some members will cut
output further by around 1.16 million barrels per day, bringing
the total volume of cuts to 3.66 million bpd, according to
Reuters calculations.
However, Iraq does not expect OPEC+ to make further cuts to
oil output at its next meeting in June, its oil minister Hayan
Abdel-Ghani said.
The U.S. could start repurchasing oil for the Strategic
Petroleum Reserve (SPR) after completing a congressionally
mandated sale in June, Energy Secretary Jennifer Granholm told
lawmakers on Thursday.
This announcement was followed by a weekly report by energy
services firm Baker Hughes Co which showed U.S. oil rigs
fell by two to 586 this week, their lowest since June 2022,
while gas rigs plunged by 16 to 141.
Meanwhile, leaders of the Group of Seven (G7) nations could
announce new measures at their May 19-21 meetings that target
sanctions evasion involving third countries, said officials with
direct knowledge of the discussions.
The tightening of sanctions will also seek to undermine
Russia's future energy production and curb trade that supports
the Russian military, the people said.
India and China, the world's No. 3 and No. 1 crude
importers, respectively, have been the key buyers of Russian
crude since the European Union embargo started in December.
(Reporting by Florence Tan; Editing by Muralikumar
Anantharaman)
florence.tan.thomsonreuters.com@reuters.net))
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