China's auto sales and US-Chinese trade in focus

Oil prices fell on Monday after reaching their highest level this year earlier during the session as China announced that auto sales fell for a seventh month in January, raising concerns about at the fuel demand of the world's second largest consumer of oil.

Futures on Brent International were at $ 66.20 per barrel at 0353 GMT, down 5 cents from their last close. Brent had previously reached $ 66.78 per barrel, its highest level since November 2018.

The West Texas Intermediate (WTI) crude futures price rises to $ 55.82 per barrel, up 23 cents from their last price. WTI prices also rose to their highest level since November, at $ 56.13 a barrel earlier Monday.

Traders said Brent prices fell after China announced weak car sales data.

Vehicle sales in China last month fell 15.8 percent from the same month in 2018, an industry badociation said Monday. This trend is in line with the 2018 trend, in which China recorded the first annual decline in vehicle sales recorded.

Sales of new energy vehicles in January, including electric vehicles, rose 140 percent, underlining expectations that car oil demand could peak in China in the coming years.

Despite these data, global oil markets remain relatively tense due to reduced supply organized by the Organization of Petroleum Exporting Countries (OPEC) and some unaffiliated producers such as Russia. The group of producing countries decided at the end of 2006 last year to reduce the production of 1.2 million barrels per day in order to prevent a significant swelling of supply.

US sanctions against oil exporters and Iran and Venezuela, members of OPEC, also supported crude oil prices.

Traders said that financial markets, including crude futures, were also backed by the hope that the US and China would soon settle their trade disputes, which dampened global economic growth.

"Positive signs in the US-China trade negotiations have helped strengthen the sentiment of the markets," ANZ Bank said on Monday.

The reduction in supply was partially offset by an increase of more than 2 million bpd in crude oil production in the United States in 2018, to a record 11.9 million bpd.

And there are signs that US production will continue to increase.

US energy companies have grown three times the number of oil rigs looking for new sources of supply, reaching 857, energy services firm Baker Hughes said in a weekly report last Friday.

This means that the number of US platforms is higher than a year ago, when fewer than 800 platforms were active.

– CNBC contributed to this report.