Oil inventories are beginning to fall in some regions as demand outpaces supply constrained by deep production cuts from OPEC leader Saudi Arabia, providing support for prices which are expected to rise in coming months.
Brent crude futures were down 45 cents to $84.54 a barrel by 0315 GMT while US West Texas Intermediate crude was at $80.25 a barrel, down 33 cents. The September Brent contract will expire later on Monday.
The more active October contract was at $84.23 a barrel, down 18 cents. Brent and WTI settled on Friday at their highest levels since April, gaining for a fifth straight week, as tightening oil supplies globally and expectations of an end to US interest rate hikes supported prices.
Both are on track to close July with their biggest monthly gains since January 2022.
“While it seems that crude may have priced in all the good news on US inflation and economic resiliency for the time being, it may continue inching higher still,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“Most of the strong buying activity has been occurring during the US trading hours; action during the Asian session remains relatively slow and a poor indicator of sentiment,” Hari added.
