Brent erases early losses on firm Asia shares

Brent crude futures stood little changed on Monday, erasing early losses as Asian shares firmed on mildly upbeat Chinese trade data, while investors continued to watch for any clues on when or if the US will move against Syria.

Also Read: Syria fears send US oil to 2-year-high settlement

Brent gave up nearly 60 cents in early Asian trade as investors locked in profits on news that several prominent US lawmakers said they had not been persuaded to approve strikes against Syrian President Bashar al-Assad's forces.

China urged the United States on Monday to proceed with caution and return to the United Nations to discuss Syria after Washington said it was not seeking Security Council approval for action in response to a chemical weapons attack last month.

Brent, which rose 1.9 percent last week amid worries over a US-led strike against Syria, was down 2 cents at USD 116.10 by 0443 GMT after settling up 86 cents on Friday. Brent hit a one-week high of USD 116.56 in the previous session.

US crude for October delivery was down 26 cents at USD 110.27 a barrel. It settled up USD 2.16 at USD 110.53 on Friday, its highest close since early May 2011.

"After Friday's rally especially in WTI (West Texas Intermediate), some profit-taking took place in the morning, but firm equities in Japan on the back of Tokyo's winning Olympics bid and elsewhere supported the oil complex," said Masaki Suematsu, energy team manager at Newedge in Tokyo.

Markets were also supported after data showed China's broad exports rose more than expected in August, boosted by improving demand for the country's goods in major markets and adding to evidence that the world's second-largest economy may have avoided a sharp slowdown.

Geopolitical risks were kept elevated on Monday at a time when markets were already coping with a loss of additional supplies from Libya.

"The overall sentiment is for the upside as supplies in Europe are tight amid declines in Libyan crude," said Kaname Gokon, deputy general manager at Tokyo-based Okato Shoji Co.

Crude oil imports from China, the world's largest buyer after the United States, hit a six-month low of 21.43 million tonnes in August, and were down 17.9 percent from July, trade data showed on Sunday, due to overhauls at several major refineries.

But imports in August were still up 16.5 percent from a year ago, taking total shipments in the first eight months of the year to 185.61 million tonnes, up 2.9 percent.

The market is also keen on any firmer signs on whether the Federal Reserve will begin to scale back its massive stimulus programme next week, sources said.

Comments from two Federal Reserve officials suggested the tapering plan is still on track. Esther George, the Kansas City Fed's consistently hawkish leader, said she favoured trimming the bond-buying programme. Chicago Fed President Charles Evans said he could be swayed towards a pullback.

Poor weather conditions halted sea traffic at all of Kuwait's ports on Sunday, state news agency KUNA reported citing the maritime authority.