Oil prices fell slightly but hovered near a four-week low below $75 a barrel today, on continued market unease over possible tighter monetary policy in China and a US proposal to tighten bank trading rules.
Asian stocks fell, hammered by worries about the US economy following the worst three-day slump on Wall Street in 10 months, and the US dollar index also dipped against a basket of currencies on receding risk appetite.
Analysts said sentiment during the week would be shaped by the latest US Federal reserve comments on interest rates due on Wednesday as well as US existing home sales data and gross domestic product for the fourth quarter.
"President Obama's proposal to tighten bank trading rules as well as expectations that China may take further steps to tighten monetary policy will also be the two key themes that will continue to cast a pall on oil and commodity markets," said Toby Hassall, chief commodities analyst at CWA Pty.
US crude for March delivery were down three cents at $74.51 a barrel by 5.34am. The contract fell $1.54 to settle at $74.54 a barrel on Friday, the lowest settlement since December 22nd and broke below the 100-day moving average of $75.20.
London Brent crude climbed 17 cents to $73.
Having fallen in seven out of eight trading sessions since January 11th, oil prices could see some trend-line support near current levels, analysts said. More bearish news could push the price toward a low of $68.59 - last seen in late December.
Separately, Mexico closed its Dos Bocas oil terminal yesterday due to bad weather, the government said. Almost all of Mexico's crude oil exports are shipped to refineries on the Gulf Coast of the United States.
US stocks could also see choppy trading this week with the latest batch of earnings and uncertainty over Ben Bernanke's Senate confirmation for another term as Federal Reserve chairman.
Money managers boosted their net long crude oil futures position on the New York Mercantile Exchange in the week through January 19th, the Commodity Futures Trading Commission said on Friday.
Reuters