Oil steadied around $73 per barrel on Monday, stabilizing after three weeks of falls, with the outlook still clouded by the outlook for global growth and sluggish fuel demand.
Fresh economic data out of China, the world's second-largest energy consumer, heightened concerns that Beijing would further tighten monetary policy.
Economists say tighter Chinese monetary policy could choke off economic recovery if it reins in domestic consumption.
U.S. crude for March delivery rose 8 cents to $72.97 a barrel by 0932 GMT (4:32 a.m. EST). Prices touched $72.43 on January 29, the lowest intraday price since December 21. London Brent crude rose 14 cents to $71.60.
Prices rose briefly earlier on Monday following a fire at a crude oil storage tank in Kuwait. State-run Kuwait Oil Co was said the fire was under control and there was no impact on production, state news agency KUNA said.
Oil prices ended January down more than 8 percent, pressured by data showing tepid energy demand in the United States, worries about fiscal turmoil in smaller euro zone countries and a stronger U.S. dollar.
RETRENCHMENT IN LENGTH
Edward Meir, analyst at brokers MF Global, said he expected oil to start the week lower as a recent rally in the dollar takes its toll. Commodities prices sometimes move inversely to the dollar as they are priced in the U.S. currency.
There is not much encouraging on the energy charts either, Meir said. Most complexes have either broken, or are close to breaking, key uptrend lines.
More disturbingly, the latest CFTC net noncommercial position reports reveal that there has hardly been a sizable retrenchment in length this past week in crude oil and gasoline, implying that further selling could easily come our way if more of the stale longs start heading for the exits.
Money managers cut net long crude oil futures position on the New York Mercantile Exchange in the week to January 26, the Commodity Futures Trading Commission said.
Markets are bracing for economic data this week culminating in non-farm payrolls on Friday..
The White House will predict a $1.6 trillion U.S. budget deficit in the 2010 fiscal year, a record and the biggest since World War Two as a share of the economy, a congressional source told Reuters on Sunday.
A key U.S. January manufacturing report later on Monday is expected to give a reading of 55.2, showing an expanding sector for the sixth straight month.
European shares fell in early trade on Monday, with banks under pressure and mining shares tracking lower metals prices. By 0908 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0.5 percent at 1,006.72 points.
Asian stocks slid on Monday after suffering their worst monthly drop in a year, while the U.S. dollar gathered steam, as fiscal worries in the euro zone prompted investors to add to short positions in the single currency.
BP Plc reports results on Tuesday and Royal Dutch Shell follows with its data on Thursday.
Shell said on Sunday it had shut three oil flow stations in Nigeria's Niger Delta after a key crude oil pipeline was sabotaged.
(Additional reporting by Fayen Wong in Perth; editing by William Hardy)