Brent crude dips on global economy worries, US oil prices steady

Brent crude prices slipped on Monday amid concerns over demand in the wake of weaker growth in major economies, while US oil markets held steady after US drilling activity fell to its lowest level in about two months.

International Brent crude oil futures LCOc1 were at $60.16 per barrel at 0248 GMT, down 12 cents, or 0.2 per cent, from their last close.

US West Texas Intermediate (WTI) crude futures CLc1 were at $51.33 per barrel, up 13 cents, or 0.3 per cent.

Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, while the country’s industrial output rose the least in nearly three years as the economy continued to lose momentum.

French business activity plunged unexpectedly into contraction this month, retreating at the fastest pace in over four years, while Germany’s private sector expansion slowed to a four-year low in December.

But oil prices were supported after General Electric Co’s (GE.N) Baker Hughes energy services firm said on Friday that US drillers cut four oil rigs in the week to December 14, pulling the total count to the lowest since mid-October at 873.

“This, when combined with (expectations) Saudi Arabia is ... to cut exports to the United States to draw down inventory builds (there) should provide a short-term base despite global slowdown fears, which continue to resonate,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

However ,the current US rig count, which serves as an early indicator of future output, is higher than a year ago when 747 rigs were active, according to Reuters news agency.

The Organisation of the Petroleum Exporting Countries and its Russia-led allies have agreed to curb output from January, in a move to be reviewed at a meeting in April. Saudi Arabia is OPEC’s de facto leader.

“The potential for a significant movement in the U.S. dollar clearly has an impact on oil pricing with the Fed meeting (this week). We’re looking outside the oil markets for its next major move,” said Michael McCarthy, chief markets strategist at CMC markets.

The US Federal Open Market Committee (FOMC) is set to start a two-day meeting on Tuesday.