LONDON: Oil retreated from gains last week, easing towards $108 a barrel as investors awaited more clues on the health of the global economy and the outlook for oil demand.
Prices jumped on Friday on better US jobs data and talk of stimulus measures by the euro zone to support growth. But investors wanted to see more clarity on the way forward in Europe’s three-year debt crisis.
Brent slipped 44 cents to $108.50 a barrel by 1231 GMT after jumping nearly 3 per cent on Friday. It earlier fell to a low of $107.90. US crude fell 26 cents to $91.14 after surging close to 5 per cent in the previous session.
US employers hired the most workers in five months in July, but an increase in the jobless rate to 8.3 per cent kept prospects of further monetary stimulus from the Federal Reserve on the table.
“Prices did rise quite a lot, so it’s probably profit-taking going on,” said Michael Creed, an economist at the National Australia Bank.
Expectations for more stimulus measures to support the debt-laden euro zone and the latest pledge by China, the world’s top energy consumer, to intensify its fine-tuning of monetary policy to support economic development also helped keep a floor under oil prices.
The market is eyeing data from China due later this week, which are likely to show the world’s second-largest economy is, at best, stabilising rather than recovering briskly.
SUDANESE OIL DEAL
On the supply side, a fall in North Sea output due to maintenance and lower exports from Iran on tight Western sanctions have shored up oil prices.
Adding further support, an explosion on the Iraq-Turkey pipeline has shut in about 16 per cent of Iraq’s oil export flow.
Repairs are expected to take up to 10 days.
Sudanese oil exports may resume soon after Sudan reached a deal with South Sudan on oil transit fees, a first step towards ending a dispute that had brought the hostile neighbours close to war. Sudan also said it wanted a border security agreement, however, before oil flows resumed.
Disputes between the countries have reduced Sudanese crude exports by about 350,000 barrels per day from early this year.