LONDON (Reuters) - U.S. oil prices stayed above $37 a barrel on Monday, as bearish economic data from Asia slowed the upward momentum after a sharp rally at the end of last week.
Japan's economy shrank in the last quarter by its most since the first oil crisis in 1974, hit by an unprecedented slump in exports, which is likely to lead to more calls for extra stimulus steps to fight the deepening recession.
The impact of the recession is also being felt in South Korea, where January exports dropped by a record 33.8 percent from a year earlier, even worse than forecast.
Energy demand in the world's largest oil consumer, the United States, is already contracting, putting huge pressure on oil prices.
U.S. light crude oil futures for March delivery were up 7 cents at $37.58 a barrel by 0920 GMT (4:20 a.m. EST) in electronic trade, after gaining $3.53 on Friday. The New York Mercantile Exchange is closed for Presidents Day and will reopen on Tuesday.
London Brent crude for April shed 1 cent to $44.80, maintaining a premium to U.S. oil due to high stock levels at the main U.S. storage hub in Cushing, Oklahoma.
Analysts see most oil prices, including North Sea Brent, trapped within a fairly tight trading range, but say the nearby U.S. futures contract is coming under pressure from high stocks.
We continue to maintain that crude prices will be trapped in a sideways band for the next several weeks, brokers MF Global said in a note to clients. Rallies above $50 look vulnerable, as given the deteriorating global macro backdrop, we do not think prices north of that level will be sustainable.
Oil's jump on Friday was largely boosted by renewed optimism that a giant U.S. stimulus package could help pull the economy out of a 14-month recession, while the gains were further encouraged as traders booked profits by selling the spread between front and second month futures contracts.
U.S. President Barack Obama on Saturday hailed congressional approval of the $787 billion economic stimulus bill as a major milestone in the country's economic recovery and the White House said he would sign the legislation on Tuesday.
Obama's aides warned Americans on Sunday not to expect instant miracles from the $787 billion economic stimulus bill he will sign this week, but said it would help eventually.
Oil prices have tumbled from their peak above $147 a barrel last year, as the economic downturn has spread to all regions of the world, cutting energy consumption.
Analysts see downside risks for oil, as economies struggle through their worst recession in decades.
World oil demand will contract more sharply than expected this year due to the economic crisis, OPEC said on Friday, an outlook that may bolster the case for further supply cuts when the group next meets in March.
U.S. economic data due to be released on Tuesday include manufacturing production in New York State and U.S. home builder sentiment for February.
(Reporting by Christopher Johnson in London and Fayen Wong in Perth; editing by Anthony Barker)