Crude oil prices dipped in early Asia on Monday with events in Ukraine the focus of possible new sanctions and China initial manufacturing data ahead and with markets in the U.S. and Canada closed for the Labor Day holiday.
On the New York Mercantile Exchange, Crude Oil for delivery in October traded at $95.76 a barrel, down 0.21%, after last week ending at $95.82 a barrel. NYMEX oil futures rose 2.58% last week, but ended August with losses of 2.11%.
Brent oil settled up 0.7% at $103.19 a barrel on ICE Futures Europe. Prices rose 0.9% last week and fell 2.7% in August.
U.S. officials are working closely with the European Union to keep their Russia sanctions programs aligned in timing and severity.
On Saturday, European Union leaders agreed to draw up options within a week for possible new sanctions against Russia, with action to follow quickly unless Moscow takes clear steps to scale back its intervention in Ukraine. Reports have emerged that hundreds of Russian soldiers have entered Ukraine.
European Council President Herman Van Rompuy said the bloc wouldn't set out specific criteria for triggering fresh sanctions but said there was "determination" to ensure Russia paid an appropriate price for heightening tensions.
"I can assure you that everyone is fully aware that we have to act quickly given the escalation on the ground," he said at the end of a summit of European leaders.
In China, we get the August CFLP manufacturing PMI at 0900 (0100 GMT) with 51.2 exepected.
This would be followed by the HSBC final manufacturing PMI at 0945 (0145 GMT) with 50.3 expected, unchanged from the previous month final.
In the week ahead, trading volumes are likely to remain light on Monday, with U.S. markets closed for the Labor Day holiday. Investors will be focusing on Thursday’s outcome of the ECB’s monthly monetary policy meeting, as well as Friday’s closely watched U.S. non-farm payrolls report.
Monetary policy announcements by central banks in Australia, Japan, Canada and the U.K. will also be awaited.
Last week, crude oil moved higher after data showed that U.S. consumer sentiment rebounded to a seven year high in August, with the final reading of the University of Michigan’s consumer confidence index rising to 82.5 from 81.8 in June.
Another report indicated that manufacturing activity in the Chicago region continued to expand in August, pointing to underlying strength in the sector.
The reports offset separate data showing that U.S. consumer spending unexpectedly fell 0.1% in July.
The reports came one day after data showed that U.S. gross domestic product expanded at an annual rate of 4.2% in the second quarter, up from a preliminary estimate of 4% and rebounding from a first quarter contraction.
The economic data bolstered expectations for oil demand in the U.S., the world’s largest consumer.
Brent oil was boosted after Ukraine’s government said that Russian troops had entered the conflict in eastern Ukraine, sparking fears over more far-reaching sanctions against Moscow.
Existing sanctions have so far not disrupted oil exports from Russia, the world’s second-largest oil exporter.