Crude oil prices decline in early trade today

After climbing 2% in the previous session, oil prices dipped on Monday as investors ignored the impact of Russian output curbs and concentrated on immediate demand worries related to refinery maintenance in Asia and the United States.

Prices increased on Friday after Russia, the third-largest oil producer in the world, announced it will reduce crude production by 500,000 barrels per day (bpd), or roughly 5% of output, in March as retribution for export restrictions placed by the west in reaction to the crisis in Ukraine.

Following a 2.2% increase on Friday, Brent crude futures were down 69 cents, or 0.8%, to $85.70 per barrel. After increasing 2.1% in the previous session, U.S. West Texas Intermediate crude was trading at $79.04 per barrel, down 68 cents, or 0.9%.

Following the removal of COVID limitations in December, expectations about a resurgence in China's demand helped both futures increase by more than 8% last week. China is the world's largest importer of crude and the No. 2 oil consumer.

The improvement in China's oil consumption is causing it to reduce gasoline exports in February, but its refineries are still shipping diesel at levels above 2 million tonnes.

In October, the Organization of the Petroleum Exporting Countries (OPEC) and their allies, which included Russia, came to an agreement to reduce output by 2 million barrels per day (bpd), or about 2% of global demand.

According to OPEC countries officials speaking to Reuters, oil prices could restart their rise back to $100 per barrel later this year as a result of China's recovering demand and the constrained supply growth caused by a lack of investment.

According to a report released by Baker Hughes on Friday, the number of working oil rigs in the United States, the largest oil producer in the world, increased by 10 to 609 last week, the largest weekly increase since June.

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