Crude oil prices slipped on Monday after gains of about 3 percent in the previous session, but they were buoyed by expectations of tightening supply and signs that China-US trade tensions could ease.

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US West Texas Intermediate (WTI) futures were at $55.06 per barrel at 0122 GMT, down 20 cents, or 0.36 percent, from their last settlement. WTI settled 2.73-percent higher in the last session at its strongest closing level since Nov. 19.

International Brent crude oil futures on Monday were down 24 cents, at $62.51 a barrel, after closing up 3.14 percent in the previous session at their highest since Nov. 21.

“Crude oil prices (had) surged higher as recent supply side-issues were joined with easing concerns of weaker economic growth,” ANZ Bank said in a research note.

US energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.

Elsewhere, pressure on crisis-hit oil producer Venezuela continues to mount as US sanctions bite.

The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year, experts said after examining details posted by the Treasury Department.

Meanwhile, oil supply from the Organization of the Petroleum Exporting Countries fell in January by the largest amount in two years despite sluggish production declines from Russia, according to a Reuters survey.

Russian oil output declined to 11.38 million barrels per day (bpd) in January, or by around 35,000 bpd from the October 2018 level, the baseline for a global oil accord to curb production, missing the deal’s target, Energy Ministry data showed on Saturday.

Russian Energy Minister Alexander Novak has said the country’s overall cuts would total 50,000 bpd in January from October. Russia has pledged to reduce oil output by 230,000 bpd from October.

Hopes for thawing China-US relations have also helped ease concerns over slowing economic growth.

“While the United States and China have yet to reach a deal, markets were buoyed by reports that they have made significant progress,” said ANZ.

US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.

First Published:Feb 4, 2019 7:38 AM IST