Oil steady ahead of US-China phase one signing this week

Crude oil futures was stable during mid-morning trade in Asia Monday as market participants anticipated, as per media reports, that the US and China will sign phase 1 of the trade deal this week.

At 10:48 am Singapore time (0248 GMT), the front-month March ICE Brent crude futures rose 2 cents/b (0.03%) from Friday's settle at $65.00/b, while the NYMEX February light sweet crude contract was 6 cents/b (0.1%) higher at $59.10/b.

"White House economic advisor, Larry Kudlow, said that everything is in place on the China trade deal ... Sentiment has been generally positive as the market looks ahead to a period of stability on the trade front," ANZ said in a report Monday.

The deescalation of tensions between US and Iran had also helped stabilize oil prices as market participants waited for fresh cues.

"US-Iran tensions appear to have come and passed very quickly in the past couple of sessions with the attention now shifted back to the key items from the beginning of the year," IG's market strategist Pan Jingyi said.

"As far as Asia markets are concerned, early movers have commenced the week on soft footing following the poor leads from Wall Street last Friday. There is perhaps no surprise here as investors look to lock in some profit ahead of a week full to even risks," Pan added.

The US, on Friday, announced new sanctions against Iranian officials and its construction, manufacturing, textiles, and mining sectors in response to Iranian retaliatory strikes on US bases in Iraq Tuesday.

The sanctions, announced at the White House by US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, were included in an executive order, which will include both primary and secondary sanctions, prohibiting trade with these sectors.

"The President has been very clear: we will continue to apply economic sanctions until Iran stops its terrorist activities and commits that it will never have nuclear weapons," Mnuchin said.

Meanwhile, anticipation of oversupply, on the other hand, capped further price gains, analysts added.

"Without Iran related energy disruption, additional non-OPEC supply will comfortably exceed demand, likely placing downward pressure on prices ... Although OPEC and friends have protected prices by cutting production. Still, the threat of excess oil supply continued to weigh on market structures," Stephen Innes, chief Asia market strategist at AxiTrader, said in a note Monday.

Market participants will look to fresh cues from the inventory report by the American Petroleum Institute and the Energy Information Administration due later Tuesday and Wednesday, respectively.

As of 0248 GMT, the US Dollar Index was up 0.06% at 97.100.