New York (AFP) - Oil prices traded mixed Monday after China slashed bank reserves requirements to get credit flowing more easily in the world's largest energy consumer.
West Texas Intermediate for May delivery climbed 64 cents to close at $56.38 a barrel on the New York Mercantile Exchange.
In London, Brent North Sea crude for June delivery, the global benchmark, was unchanged from Friday at $63.45 a barrel.
China's central bank announced Sunday it was cutting the reserve requirement ratio, the amount of cash that commercial banks must hold in reserve, by one percentage point, the second such move this year to boost lending. The move took effect Monday.
"While additional RRR cuts were expected throughout 2015, the size and timing of this cut indicates leaders are more deeply concerned about the state of the economy than official comments previously indicated," said Brian Jackson, China economist at IHS Global Insight.
Jackson noted it was the largest RRR reduction since November 2008 amid the global financial crisis.
Lifted in early trade by the Chinese action, prices retraced some gains after Saudi Arabia's oil minister, Ali al-Naimi, pointed to strong crude production, only for prices to rise again on a bullish forecast for US inventories.
"It's been choppy," said John Kilduff of Again Capital.
Investors, he said, are "trying to determine when the production tide is going to turn" in the United States, which has been pumping out historic amounts of crude despite a global supply glut.
Kilduff said a report by energy information company Genscape, showing that crude reserves at the key storage hub in Cushing, Oklahoma, had fallen by 900,000 barrels, had boosted trader sentiment.
Dealers are also reading a drop in US oil rig activity as a sign of a production slowdown that could alleviate the global oversupply and push up prices that have halved since mid-2014.
"There may be scope for oil prices to be lifted further in the near term both by falling US oil output and crude stock data, and by better news on the demand side from the economies of the US, eurozone and China," said Julian Jessop, head of commodities research at Capital Economics.