Oil prices fell on Monday but pared losses along with the U.S. stock market as investors bet that China`s economic stimulus steps on Sunday would be sufficient to boost the world`s No. 2 economy and bolster its crude demand.
Global benchmark Brent crude had tumbled below $83 per barrel early in the session, partly on concerns the U.S.-China trade war could weaken crude demand in China.
But prices bounced off session lows as investors bet that Sunday`s move by China`s central bank to slash lenders` reserve requirements would lift economic growth and spur oil imports.
"China`s still scrambling to buy oil, and any dip in crude prices" will encourage Chinese buyers, said Phillip Streible, senior market strategist at RJO Futures in Chicago. "Some people have been bargain hunting after three big days down."
Brent crude hit a session low of $82.66 and then bounced back to trade 71 cents lower at $83.45 per barrel at 1:04 p.m. EDT (1704 GMT). Brent hit a four-year high of $86.74 last week.
U.S. crude was down 45 cents at 73.89 per barrel, off its session low of $73.07.
Traders said oil prices also got a boost from a new report showing just a small drop in oil inventories last week at the main U.S. storage hub at Cushing, Oklahoma last week.
Cushing storage levels were about 28.5 million barrels on Friday, market intelligence firm Genscape reported, according to traders who saw the report. They said that was down only 15,000 barrels from what Genscape reported earlier in the week.
The report of just a small crude build eased fears that had pressured oil prices after U.S. government data on Wednesday showed a large build in the U.S. commercial crude stockpile.
Also pressuring oil below $83 a barrel in early trade were reports that some Iranian oil exports will keep flowing after the U.S. re-imposes sanctions.
Last week, Saudi Arabia announced plans to lift crude output next month to 10.7 million barrels per day (bpd), the Kingdom`s highest level ever.
Iran`s Oil Minister Bijan Zanganeh on Monday called a claim by Saudi Crown Prince Mohammed bin Salman that the Kingdom could replace Iran`s crude exports "nonsense."
"Iran`s oil cannot be replaced by Saudi Arabia nor any other country," Zanganeh said, according to his ministry`s website.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)