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Oil eases ahead of China, US data, but OPEC+ cuts limits slide

10 July 2023 09:18 (UTC +04:00)

Oil prices dipped in Asian trade on Monday as investors tread cautiously ahead of fresh economic data from top consumers the United States and China this week, though expected crude supply cuts from Saudi Arabia and Russia limited losses, APA reports citing Reuters.

Brent crude futures fell 51 cents, or 0.7%, to $77.96 a barrel by 0345 GMT, and U.S. West Texas Intermediate crude was at $73.34 a barrel, down 52 cents, or 0.7%.

"Oil traders may be cautious ahead of the U.S. CPI and China's slew of economic data later this week," CMC Markets analyst Tina Teng said.

However, crude prices could rebound after OPEC+ announced plans to further reduce supply, she said.

Saudi Arabia will extend its 1 million barrels per day (bpd) output cut into August and Russia will cut crude exports by 500,000 bpd. Instead of cutting output, Russia will be using the crude to produce more fuel to meet domestic demand, a government source told the source on Friday.

Saudi Arabia's cuts are easing its oil glut as floating storage off the Egyptian Red Sea port of Ain Sukhna, is down by almost half to 10.5 million barrels from mid-June, according to data from oil analytics firm Vortexa as of July 7.

Non-OPEC+ supply has been keeping up with global demand, JP Morgan analysts said in a note, adding that OPEC+ needs to deepen its cuts by another 700,000 bpd in the second half of the year on top of announced reductions and extend them into 2024.

In the U.S., Friday's data showed still-strong wage growth and a slight drop in the unemployment rate this week will likely keep the Federal Reserve on track to raise interest rates at the upcoming July meeting.