Crude oil futures rose slightly in Asia Monday, though prices continued to hover in a narrow band amid a mixed set of market and macroeconomic news.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $94.22 a barrel at 0557 GMT, up $0.66 in the Globex electronic session. February Brent crude on London's ICE Futures exchange rose $0.42 to $111.06 a barrel.
Oil prices rose in recent days following news of a production cut by Saudi Arabia and higher Seaway pipeline capacity in the U.S., but crude gave up some of those gains on news of a higher-than-expected rate of inflation in China, which quashed hopes for more monetary policy loosening.
"Crude oil markets have started the year on a positive note, drifting marginally higher with front month Brent stepping out of its recent $108-$111/barrel range," said analysts at Barclays in a note.
"While the fiscal cliff agreement has cleared the macro cloud for now, there continues to be a lack of directional momentum for prices to move much further away from the $111/barrel mark, at least for now," they said.
The oil market's focus this week will likely be on China's fourth-quarter growth figures due Friday morning that will help traders gauge the economic health of the world's second-largest oil consumer, which is critical for the demand-supply balance for crude oil.
"Markets are cheered by better-than-expected Chinese trade statistics, continuing a run of feel-good macroeconomic news following recent positive developments in the U.S. and Japan," said analysts at Facts Global Energy in a research note to clients.
"Despite the optimism, we think that demand fundamentals are perhaps less robust," they said citing rising European and U.S. stock levels.
The Saudi production cut in December "in our view is a cause for caution rather than optimism, as current price levels are being supported mainly by Saudi's willingness to curtail production, which cannot be counted on indefinitely," the analysts said.
Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--rose 36 points to $2.7431 a gallon, while February heating oil traded at $3.0213, 128 points higher.
ICE gasoil for February changed hands at $946.50 a metric ton, up $6.75 from Friday's settlement.
