West Texas Intermediate remained over US$71 per barrel after rising more than 4% on Friday, when futures reversed a hefty weekly loss.
While worries of a US recession and bank collapses have lately roiled markets, sending crude to its lowest intraday level since late 2021, physical demand signs suggest that at least part of the recent price drop may have been exaggerated.
Traders will receive two forecasts for the second half of the year this week.
The Organisation of Petroleum Exporting Countries issues its monthly snapshot on Thursday and, ahead of that, the US Energy Information Administration delivers its short-term outlook on Tuesday.
The world’s largest oil producer, Saudi Aramco, will also disclose earnings.
Crude has dropped by about 11 percent this year as the Federal Reserve’s most aggressive tightening campaign in a generation spurred concerns of a US slowdown or recession, although most investors now expect that policymakers will pause rate increases.
The drop has come despite a surprise production cut by OPEC and its allies including Russia. Still, there’s little evidence that Moscow has so far reduced its supply despite a vow to do so. Oil’s recent weakness may reflect “an outsized amplification of the real economic dampening, especially given the financial linkages,” said Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank Ltd.
There are now risks of a further “OPEC supply response, or at least jawboning from the group, in an attempt to backstop or shore up prices,” he said. Speculators sharply ramped up bets against oil markets last week, data showed.
Money managers posted the largest increase on record in short positions on Europe’s diesel market, while also lifting them by the most since last March on Brent.
US crude and diesel markets also saw increases just weeks after the OPEC+ cut designed to stem bearishness.