By Christopher Johnson
LONDON (Reuters) – Oil prices steadied on Monday after slipping by around 2 percent last week, but remained under pressure from oversupply and concern over the prospects for global economic growth and fuel demand.
Brent crude oil <LCOc1> was down 10 cents a barrel at $60.18 per barrel by 0945 GMT. U.S. light crude <CLc1> was down 5 cents at $51.15.
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Both benchmarks fell more than 25 percent through October and November as a supply glut inflated global inventories but have stabilized over the last three weeks, trading within fairly narrow ranges as oil producers have promised to cut production.
Many investors doubt planned supply cuts by the Organization of the Petroleum Exporting Countries and other producers such as Russia will be enough to rebalance markets.
OPEC and its allies have agreed to reduce output by 1.2 million barrels per day (bpd) from January, in a move to be reviewed at a meeting in April.
But U.S. shale output is growing steadily, taking market share from the big Middle East oil producers in OPEC and making it harder for them to balance their budgets.
“The dust has settled on the decision by OPEC/non-OPEC to slash production,” said Stephen Brennock, an analyst at London brokerage PVM Oil. “Yet the producer alliance has so far little to show for it.”
“Far from breathing new life into the energy complex, oil prices are below the pre-OPEC meeting level. The truth of the matter is that fresh OPEC+ cuts will not go far enough to overturn the incumbent supply surplus,” he added.
Increasing concerns about weakening growth in major markets such as China and Europe have also dampened the mood in oil and other asset classes.
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 energy services firm Baker Hughes said U.S. drillers reduced oil rigs in the week to Dec. 14, pulling the total count to the lowest since mid-October at 873. <RIG-OL-USA-BHI>
However, the current U.S. rig count, which serves as an early indicator of future output, is higher than a year ago.
(Reporting by Christopher Johnson in London and Koustav Samanta in Singapore; editing by Adrian Croft and Jason Neely)