Oil prices fell on Monday after the long Christmas weekend, with US crudes defending a newly gained premium over internationally traded Brent contracts.
Front-month US West Texas Intermediate (WTI) futures were trading at $37.91 per tonne at 0015 GMT, down 19 cents from their last settlement.
Brent was down 18 cents at $37.71 a barrel, meaning that US crude defended a premium it gained over the globally traded benchmark last week.
“Markets are generally weak, so the trend remains for lower prices, but do watch out for sharp moves in the low liquidity days between Christmas and New Year,” one oil trader said.
The US market tightened in December following reduced drilling activity, a dip away from record stockpiles and the prospect of crude exports following a 40-year export ban.
At the same time, international markets remain over supplied as producers like Russia and the Organization of the Petroleum Exporting Countries (OPEC) produce between half a million and 2 million barrels of crude every day in excess of demand.
At the same time, developed and emerging economies especially in Asia are slowing.
Japan’s industrial output fell 1.0 percent in November from the previous month, government data showed on Monday, suggesting that sluggish emerging market demand continues to cloud the outlook for the economy.