After reaching 10-month highs last week thanks to fresh cuts in crude output by Saudi Arabia and Russia, oil prices fell on Monday.
Saudi Arabia and Russia last week reported that they will broaden intentional inventory cuts of a joined 1.3 million barrels each day (bpd) for the rest of the year.
By 0848 GMT on Monday, Brent crude was down 40 cents, or 0.44 percent, to $90.25 per barrel, while U.S. West Texas Intermediate crude was down 65 cents, or 0.74 percent, to $86.86.
Investors appeared to be focusing on demand drivers on Monday, with the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) scheduled to release monthly reports this week. Last week, the supply cuts overshadowed ongoing concerns regarding Chinese economic activity.
Mukesh Sahdev, head of downstream and oil exchanging at Rystad Energy, said the effect of the Saudi-drove cuts would be more clear before the year’s over, when treatment facilities finish upkeep and increment creation.
Sahdev went on to say, “Refinery maintenance will lower crude demand by 2 million to 2.5 million bpd in September and October, but it will rebound in November and December, partially offsetting the price effects of the cuts.” He estimated that refinery outages would reach their highest point in October, when they would reach 10 million bpd.
The European Central Bank (ECB) is expected to make its monthly interest rate decision this week, which is one of the economic factors in the spotlight. Consumer price index (CPI) data for August are due on Wednesday in the United States.
“The vital monetary number for the US this week will be US expansion information, which is probably going to impact all that from stocks to forex to fixed pay and ware costs,” said Naeem Aslam of Zaye Capital Business sectors.
