LONDON- Oil prices rose on Monday, scraping back some of the losses after the previous session's near-7 percent fall, although a darkening demand outlook and uncertainty over global economic growth limited gains.
Brent crude futures were last up $1.16 on the day at $59.96 a barrel by 1044 GMT, while U.S. futures were up 69 cents at $51.11 a barrel.
The gains partly made up for Friday's sell-off.
"It is difficult to say whether $60 is the new normal, as there doesn’t seem to be a 'normal' at the moment," Cantor Fitzgerald oil and gas analyst Jack Allardyce said.
"The recent weakness seems dramatic given the lack of actual catalysts – it seems to have been driven by a wider impending sense of doom amidst weak equities, geopolitics, subsequent softening demand and increasing supply," he said.
The International Energy Agency predicts global oil demand will top 100 million barrels a year in 2019, growing at a rate of 1.4 million barrels per day, but this is down from its initial assessment in June of 1.5 million bpd.
A rising dollar that has undercut demand in key emerging market economies, higher borrowing costs and the threat to global growth from the escalating trade dispute between the United States and China have pushed investors out of assets that are more closely aligned with the global economy, such as equities or oil.
In November alone, hedge funds have pulled more than $12 billion out of the oil market, based on a record drop in net long holdings of Brent and U.S. crude futures and options against the average oil price for the month.
"2019 will be a choppy year for the oil market as questions surrounding the prospect of a slowing global economy and a supply surplus are expected to increase," analysts at Fitch Solutions said on Monday.
Fitch said that even an expected supply cut led by the Organization of the Petroleum Exporting Countries (OPEC) following an official meeting on Dec. 6 "may not be enough to counteract the bearish forces".
The options market shows that investors in Brent crude, which is more closely linked to OPEC output, have increased their holdings of contracts that give the owner the right, but not the obligation, to sell oil futures below the current benchmark futures price, by 10 percent.
This compares with an increase of just 4.5 percent in holdings of options that give the owner the right to buy oil futures above the current price by a certain date.