Oil drops after data shows industrial profits decline in China
Brent crude was down 12 cents, or 0.2%, at $61.90 a barrel by 0409 GMT, having gained more than 4% last week, its best weekly gain since Sept. 20.
West Texas Intermediate (WTI) crude futures were down 16 cents, 0.3%, at $56.50 a barrel, after rising more than 5% last week, also the biggest weekly increase since Sept. 20.
Profits at Chinese industrial companies fell for the second straight month in September as producer prices continued their slide, highlighting the toll a slowing economy and protracted U.S. trade war are having on corporate balance sheets.
“There have been some small profit-taking sells on the weak China data released on Sunday and unwinding of weekend hedges,” said Stephen Innes, Asia Pacific market strategist at Axi Trader.
“But the market remains well supported on the dip,” he added, pointing to signs of progress in China-U.S. trade talks.
The two sides issued a statement on Friday saying they are close to finalizing some parts of a trade agreement.
U.S. energy companies also reduced the number of oil rigs operating this week, leading to a record 11-month decline as producers follow through on plans to cut spending on new drilling.
Russia’s energy ministry said on Friday it is continuing close cooperation with Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers to enhance market stability and predictability.
The statement came a day after Igor Sechin, CEO of Russian oil producer, Rosneft, said the September attacks on Saudi oil assets created doubts over its reliability as a supplier. The attacks temporarily shut down around half of the kingdom’s oil output.
OPEC+, an alliance of OPEC members and other major producers including Russia, has since January implemented a deal to cut output by 1.2 million bpd to support the market.
The pact runs to March 2020 and the producers meet to review policy on Dec. 5-6.
Elsewhere, a suggestion by U.S. President Donald Trump that Exxon Mobil or another U.S. oil company could operate Syrian oil fields drew rebukes from legal and energy experts.
Money managers cut their net long U.S. crude futures and options positions in the week to October 22, the U.S. Commodity Futures Trading Commission said on Friday.
(Reporting by Aaron Sheldrick; editing by Richard Pullin & Simon Cameron-Moore)