Oil prices edged up on Monday as a weaker dollar offset fresh concerns about the hit to global fuel demand from renewed lockdowns to curb the spike in COVID19 infections.
Brent crude futures for March rose 32 cents, or 0.6, to 55.73 a barrel by 0729 GMT, while U.S. West Texas Intermediate crude for March was at 52.62 a barrel, up 35 cents, or 0.7.
Petroleum markets have been in a tug of war recently Downward revisions to the global demand outlook from the IEA and renewed fears of Chinese demand deceleration due to new coronavirus strains have kept a lid on oil prices, Citi analysts said in a note.
Yet, production outages from Libya and Kazakhstan along with OPEC cuts and a weaker U.S. dollar have supported market sentiment.
Libyas Waha oil has resumed production after pipeline repairs while output from Kazakhstans giant Tengiz field was disrupted by a power outage on Jan. 17.
China reported an increase in new COVID19 cases on Monday, casting a pall over demand prospects in the worlds largest energy consumer, the main pillar of strength for global oil consumption.
Last Friday prices came under further pressure after data from the U.S. Energy Information Administration showed U.S. crude inventories surprisingly rose by 4.4 million barrels in the week to Jan. 15, versus expectations for a draw of 1.2 million barrels.
The number of oil and natural gas rigs added by U.S. energy firms rose for a ninth week in a row in the week to Jan. 22, but are still 52 below this…