Oil benchmarks were up in early trading hours on Monday, as a fresh report from Rystad Energy forecasted a 20 percent drop in output in East and Southeast Asia between 2017 and 2025.
The US West Texas Intermediate crude contracts were up 0.46 percent to $63.84 per barrel as of 06:30 GMT. Meanwhile, Brent futures rose 0.28 percent to $67.50 a barrel.
According to the document, total oil production in East and Southeast Asia is expected to fall from 13.1 million barrels of oil equivalent (BOE) per day to 10.4 million BOE/D by 2025.
The lack of new oil discoveries in the region, along with the maturity of the oil fields already in place seem to be the causes of this trend. The limited number of sources is a key factor now.
Despite a weaker production seen, demand for crude and refined products in East and Southeast Asia continues to build, with China leading among buyers.
The Paris-based International Energy Agency estimates that China will produce an average of 3.8 million barrels per day (bpd) in 2018, which would be only 0.5 million bpd less than in 2015.
Ahead this week, market players will be focusing on the release of crude and refined products stockpiles on Tuesday and Wednesday and the weekly rig count on Friday.
Attention will also be directed to the dollar’s dynamic, which has the power to control quotes as commodities are denominated in this currency.
A stronger greenback makes contracts more expensive for investors holding foreign currencies, dampening interest on the commodity.
The US dollar index, which measures the greenback against six major currencies, was trading 0.24 percent lower at 89.60 by the time of this writing.