At the time of writing, the barrel of WTI is down -1.30% at $ 66.20, looking vulnerable below a break of the $ 66 support, as rising U.S. crude stockpiles dent the sentiment.
Despite the cautious mood in oil markets, bullish sentiment found some support from expectations that US sanctions against Tehran would restrict Iranian crude exports, tightening global supply.
Benchmark Brent crude oil LCOc1 was down $1.01 a barrel at $71.45 by 9:51 a.m. EDT (1351 GMT).
Fresh weekly data on US commercial crude inventories on Tuesday and Wednesday to gauge the strength of demand in the world's largest oil consumer and how fast output levels will continue to rise will capture the market's attention.
OPEC expects oil supply by countries outside the cartel to increase by 2.13 million bpd next year, 30,000 bpd more than forecast last month, with much of the increase coming from new US shale production.
Singapore-based brokerage Phillip Futures said on Monday that "trade protectionism and escalating tensions between the world's largest economies (The United States and China) have cast a looming shadow on global oil demand growth in 2018". Some oil bulls are preparing for oil prices of US$150 and even US$200, Reuters reported yesterday, citing prominent hedge fund manager Pierre Andurand and Jean-Louis Mee, chief executive of Westbeck Capital. Analysts expect a 1.7 million-barrel drop in crude stocks for the week ended August 10.
For the moment the IEA did not change its forecast for global demand for oil to increase by 1.4 mbd.
Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC).
In the latest round of levies, China said it would impose additional tariffs of 25 per cent on $16 billion worth of US imports.
Hedge funds and other money managers cut their bullish positions on United States crude to the lowest level since June, data showed on Friday.
In spite of the cautious mood in oil markets, bullish sentiment found some support from expectations that US sanctions against Tehran would restrict Iranian crude exports, tightening global supply. Iran's foreign minister said that the Organization of the Petroleum Exporting Countries (Opec) nation will not meet with USA at the United Nations General Assembly in NY in September, with sanctions on the Middle Eastern nation's oil industry set to be implemented on Nov 5.