Crude futures edged lower on Monday following sharp declines last week despite expectations that major producers will cut their supplies for longer in a bid to reduce high global inventories.
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Prices were supported by comments from Saudi Arabia's Energy Minister Khalid Al-Falih, who Monday said he was confident production cuts led by the Organization of the Petroleum Exporting Countries will be extended into the second half of the year.
Brent crude, the global oil benchmark, fell 0.1% to $49.03 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.1% at $46.16 a barrel.
OPEC and other major producers including Russia agreed to cut production by 1.8 million barrels a day in the first half of the year in an attempt to drain large global stocks. The cartel is due to meet on May 25 to decide whether to curb output for longer.
"It looks much more likely that OPEC are going to continue the deal over the rest of the year, which should be supportive of prices," said Tom Pugh, commodities analyst at consultancy Capital Economics.
The election of Emmanuel Macron, a pro-free trade centrist, as France's next president also helped to assuage concerns that the European economy may see further headwinds.
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Oil plunged more than 5% last week, dropping to the lowest level since November. The selling pressure was ignited by concerns that global oil stocks weren't falling as quickly as was hoped.
"The fundamentals haven't improved because the world is still awash with oil," said a Singapore-based crude trader, noting that the upsurge in U.S. shale production and exports, especially to Asia, is making it tougher for OPEC to compete.
China's April crude imports rose 5.6% compared with the same period a year ago, Customs data showed on Monday. Most China market observers say the country will remain thirsty for foreign crude but import growth will moderate this year, given the slowing economy and a raft of new rules that crimp the import ability of local refiners.
"Importing an average of 8.5 million barrels per day between January and April, China has overtaken the U.S. as the world's largest crude oil importer," said Commerzbank in a daily note.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.1% to $1.51 a gallon. ICE gasoil changed hands at $434.75 a metric ton, down 25 cents from the previous settlement.
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(END) Dow Jones Newswires
May 08, 2017 05:52 ET (09:52 GMT)