Oil prices were little changed on Monday, hovering above $68 a barrel, as concerns about weak energy demand in the United States, the world's top energy consumer, were offset by a broad rise in Asian equities markets.
Oil prices, which fell 6.5 percent last week, have been trading in a range between $65 and $75 a barrel since the start of August, with prices swinging on economic data as investors seek clues about the speed of a recovery from the recession.
U.S. crude for October delivery edged up 22 cents to $68.24 a barrel by 12:49 a.m. EDT. The contract settled 6 cents higher at $68.02 a barrel on Friday.
London Brent crude rose 54 cents to $67.36 a barrel.
Oil had fallen by as much as 48 cents in early trading on Monday amid demand concerns in the United States as the country's jobless rate struck a 26-year high and the summer holiday season, a period of strong gasoline demand, comes to an end.
But a broad rise in Asian shares, which was driven by a pledge by G20 leaders over the weekend to keep stimulus measures in place for longer and draft rules from China allowing more foreign portfolio investment, helped improved investors' risk appetite and lent support to oil prices.
Still, analysts said weak oil demand in the U.S. would probably keep crude prices rangebound.
As the long Labor Day weekend comes to an end, we're looking at the end of peak gasoline demand season in the U.S., which means we're now entering a period of slack seasonal demand with refineries scaling back their runs, said Toby Hassall, a commodities analyst at CWA Global Markets in Sydney.
Increased crude supplies from the Organization of Petroleum Exporting Countries (OPEC) due to slipping compliance, could also put downward pressure on oil prices in the near term, analysts said.
OPEC members will gather in Vienna for a quarterly output policy meeting on Wednesday, with most analysts expecting the producer group, the source of more than a third of the world's oil supply, to maintain its official output target to keep prices stable around $70.
We expect another OPEC quota rollover to be the result of the meeting; in addition, there will undoubtedly be calls for better quota compliance (i.e., lower production) from OPEC members such as Angola, Iran, and Venezuela, Societe Generale said in a research note.
Traders will also be watching a weather disturbance that is moving westward from Africa. There is a medium chance of it becoming a tropical cyclone in the next 48 hours, the U.S. National Hurricane Center said on Sunday.
Crude oil speculators on the New York Mercantile Exchange reduced their net long positions in the week to Sept 1, the Commodity Futures Trading Commission said in a report on Friday.
(Reporting by Fayen Wong; Editing by Clarence Fernandez)