Oil started the new week lower after its biggest weekly gain since early April as investors balance signs of tight supply and demand concerns.
Brent oil traded near $78 a barrel after closing 4.8 percent last week after Saudi Arabia and Russia’s commitments to cut supply.
Treasury Secretary Janet Yellen said the risk of recession in the US was “not completely off the table” and added an element of warning to the market.
Oil is about 9 percent lower for the year, in part due to China’s sluggish economic recovery and central banks’ tough monetary tightening. A good upcoming US jobs report keeps headwinds on crude oil prices as the Fed is on track to raise interest rates this month.
Data released in Asia on Monday showed that China’s consumer inflation rate remained stable in June, with ex-factory prices falling further and continued weakness in demand. The International Energy Agency and OPEC will provide snapshots of the market this weekend as they publish monthly reports.