Investing.com - Crude oil prices remained weak in Asia on Monday, but off earlier lows after Japan's GDP data and China trade pointed to dim demand prospects.
On the New York Mercantile Exchange, crude oil for delivery in March dropped 0.80% to $29.90 a barrel. Brent fell 0.72% to $33.12 a barrel.
China reported trade data for January with exports slumping 11.2%, compared to an expected 1.9% year-on-year drop, and imports crashing 18.8%, compared to a 0.8% decline seen, for a trade balance surplus of $63.29 billion, wider than the $58.85 billion expected.
Earlier, Japan's GDP contracted 0.4% quarter-on- quarter, or an annualized 1.4%, in the fourth quarter, hit by sluggish consumer spending amid a slow wage recovery and uncertain growth prospects. An unexpected rise in business investment was outweighed by declines in other key components of the gross domestic product.
Markets in both the U.S. and Canada will be closed for national holidays.
In the week ahead investors will be watching U.S. inflation data for indications on whether the Federal Reserve will raise rates at all this year. As well, European Central Bank President Mario Draghi is to testify on monetary policy before the European Parliament's Economic and Monetary Affairs Committee, in Brussels.
During the break, China's central bank governor Zhou Xiaochuan said in an interview at the weekend there is no basis for continued yuan depreciation.
In an wide-ranging interview with financial magazine Caixin, Zhou spoke during a week-long holiday in China with markets shut, warning the PBOC won't allow speculators to dominate market sentiment, and downplayed concerns over the sharp decline in the country's foreign-exchange reserves over the past few months.
Also on Monday, in Japan, capacity utilization for December month-on-month is due as well as industrial production expected down 1.3%. The country reported that the tertiary industry activity index fell 0.8%, compared to an expected gain of 0.1%.
Last week, oil prices staged a dramatic rally on Friday, with the U.S. benchmark posting its biggest one-day gain in seven years as a renewed possibility of coordinated production cuts prompted investors to close out bets on lower prices.
Crude prices received a boost following reports late Thursday that OPEC members are preparing to cooperate on potential production cuts, according to United Arab Emirates' energy minister Suhail bin Mohammed al-Mazrouei.
The UAE is regarded as a key cog for smaller OPEC members desperate for increases in oil prices, given its reluctance to slash output in recent months. Any deal requires the approval of Saudi Arabia, the world's largest exporter. Futures received a further boost after industry research group Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. decreased by 28 to 439 last week.
Despite Friday’s strong gains, New York-traded oil futures declined $1.53, or 4.69%, on the week, the second straight weekly loss.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery soared $3.30, or 10.98%, on Friday to close the week at $33.36 a barrel. A day earlier, Brent futures dipped 78 cents, or 2.53%. On the week, London-traded Brent futures declined 63 cents, or 2.06%, the second consecutive weekly drop.
Brent prices are down almost 13% in 2016 as investors worried that a huge oversupply in crude was coinciding with a global economic slowdown.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share. Oversupply issues will be exacerbated further as Iranian exports return to the global oil market.