Oil fell in a low-volume session, unable to withstand a rising U.S. dollar while investors waited for upcoming supply constraints to hit the market.

Traders exited risk assets Monday, pausing a rally in which prices have risen roughly 20 per cent in the last three weeks. OPEC+’s surprise decision to slash output beginning in May reignited bullish bets on prices, yet some demand indicators are flashing signs of weakness. 

“We’re waiting to see what’s really happening with the economy, but it is a slower recovery,” Ed Morse, global head of commodities research at Citigroup Inc., said in a Bloomberg Television interview. “It’s a services recovery. If anything, that will be an end-of-year phenomenon.”

Traders are awaiting insights this week into monthly outlooks from OPEC and the International Energy Agency as well as U.S. inflation data and Federal Reserve minutes.

Separately, Turkey wants to negotiate payments it owes Iraq before a pipeline that exports 400,000 barrels a day is reopened, according to Turkish officials familiar with the situation. 

Russia’s Energy Ministry, meanwhile, said that the nation reduced its oil output by about 700,000 barrels a day last month, according to a person familiar with the data. Nevertheless, that figure is inconsistent with indicators on the nation’s March seaborne exports and supplies to domestic refineries.

Prices:

• WTI for May delivery dropped 96 cents to settle at US$79.74 a barrel at in New York.
• Brent for June settlement dropped 94 cents to settle at US$84.18 a barrel.