Oil steady, little help from Chinese Interest Rate cut

Crude futures were little changed on Monday as moves by China to bolster its flagging economy failed to instill confidence that oil demand in the world’s largest energy consumer would improve quickly to absorb a global supply glut and lift prices.

China cut interest rates for the third time in six months on Sunday to stoke its sputtering economy, which is headed for its worst year in a quarter of century.

“There’s been limited response in the oil markets today,” said Ric Spooner, chief analyst at CMC Markets in Sydney.

“The stimulus is probably seen as helping to soften a decline rather than really turn things around.”

Data on Friday showing record crude imports by China in April did not support oil prices, either.

ANZ analysts said the imports in April were “likely in response to opportunistic buying and stockpiling”.

June Brent crude LCOc1 edged down 3 cents to $65.36 a barrel by 0351 GMT (11.51 p.m. EDT) after dropping 1.6 percent last week. June West Texas Intermediate (WTI) CLc1 dropped 12 cents to $59.27 a barrel after rising for eight straight weeks, the longest winning stretch since late 2012 to early 2013.

U.S. crude price gains may have encouraged shale producers to resume drilling again as they added rigs to the Permian Basin for the first time this year, oil services company Baker Hughes Inc (BHI.N) said on Friday.

Brent’s four-week advance to hit 2015 highs halted late last week as excess European and African crude supply dragged prices down, with a rally technically exhausted.

In Libya, oil production remained volatile after a protest closed the Nafoura oilfield, cutting output at Libya’s Arabian Gulf Oil Co (AGOCO) by some 35,000 barrels per day (bpd).

Source: Reuters