Investing.com - U.S. oil prices shook off earlier losses to turn higher on Monday, as investors looked ahead to key U.S. economic data later in the day to gauge the strength of the economy and for further indications on the future course of monetary policy.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March fell to a session low of USD96.79 a barrel, the weakest since January 29, before turning higher to trade at USD97.84 a barrel during U.S. morning hours, up 0.35%.
WTI oil prices settled 0.75% lower on Friday to end at USD97.49 a barrel. Nymex oil futures were likely to find support at USD96.32 a barrel, the low from January 29 and resistance at USD98.39 a barrel, the high from January 31.
The U.S. Institute of Supply Management is to produce data on manufacturing activity for January later in the session, a leading economic indicator.
Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to scale back stimulus.
Oil prices were lower during the Asian and European sessions as concern the global economic recovery is faltering dampened demand for growth-linked assets.
China''s official non-manufacturing PMI slipped to its lowest level since December 2008 in January, falling to 53.4 from 54.6 in December.
The deterioration in the services sector adds to declining manufacturing PMIs. Data released over the weekend showed that China’s official manufacturing PMI fell to a six-month low of 50.5 in January from 51.0 in December.
The Asian nation is the world''s second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, market players continued to monitor liquidity conditions in emerging markets, such as Turkey and South Africa.
Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Federal Reserve stimulus and concerns over a slowdown in China.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for March delivery shed 0.4% to trade at USD105.96 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD8.12 a barrel.
The spread between the two contracts narrowed to a three-month low as the Keystone XL pipeline linking Cushing, Oklahoma, to the U.S. Gulf Coast began making deliveries earlier in January.
Flows will rise over the course of the year toward its 700,000-barrel capacity, which should help alleviate a glut of crude in the Midwest.
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