Oil Prices Edge Up; Gains Capped As Investors Eye Global Risks
Crude prices edged higher on Monday, supported by last week's better-than-expected U.S. jobs data and geopolitical risks, but worries that a slower global economy will curb appetite for oil kept a lid on prices.
Brent crude futures were up 8 cents by 0647 GMT at $64.31. U.S. West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel.
Prices were supported by "a better than expected (non-farm payrolls), but traders remain incredibly cautious about the dimmer global economic overhang," said Stephen Innes, managing partner at Vanguard Markets in Bangkok.
Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%.
U.S. job growth rebounded strongly in June, with government payrolls surging, the Labor Department's closely watched employment report showed on Friday, suggesting May's sharp slowdown in hiring was probably a one-off.
Employers added 224,000 jobs last month, the most in five months, the report showed.
But the U.S.-China trade war has dampened prospects of global economic growth and oil demand.
The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the U.S. Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting.
White House Economic advisor Larry Kudlow has confirmed top representatives from the United States and China will meet in the coming week to continue trade talks.
Still, Japan's core machinery orders fell for the first time in four months in May, posing the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment.
Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies.
Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning 'to be careful' from U.S. President Donald Trump, who pulled out of the pact last year.
"Geopolitical risks remain plentiful, but the start of the week could see Iran worries ease," said Edward Moya, senior market analyst at OANDA.
Meanwhile, U.S. energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.
(Reuters)
