Benchmark oil prices may stage a modest recovery this week, lifted by data pointing to a pickup in economic activity in the U.S., the world's leading oil consumer, according to CNBC's latest survey of traders and strategists.
More than half of respondents polled by CNBC (57 percent or 12 out of 21) said prices will rise this week, with 24 percent (five out of 21) expecting prices to decline and 19 percent (four out of 21) saying prices will be little changed.
A strong jobs report this Friday will bolster U.S. Western Texas Intermediate (WTI) oil futures in particular, said David Lennox, resources analyst at equity research firm Fat Prophets in Sydney. "U.S. growth should act as a buffer to stop the WTI price from breaking below the $100 a barrel level," Lennox said. "We are bullish on WTI and Brent prices but only modestly."
Economists believe this week's March data should largely be free of the distortions caused by recent extreme winter weather, and will likely show resilience in the broader economy.
On average, economists believe around 200,000 more Americans joined the workforce in March, according to Reuters estimates.
Despite the bullish tilt of the CNBC survey, IG Markets' data shows investor opinion is split on U.S. crude's near-term direction. Forty-nine percent of IG clients with open positions on WTI crude expect prices to rise.
Sentiment towards Brent crude is clearer-cut and corresponds with the poll, with almost three-quarters of IG clients with open positions taking a long view, or putting on bullish bets, ahead of March U.S.payrolls.
Brent, meanwhile, may be drawing some support from signs that the volumes from the Organization of Petroleum Exporting Countries (OPEC) declined due to unrest and outages in Angola and Libya.
Supply from OPEC averaged 29.72 million barrels a day - its lowest since December - down from a revised 30.06 million b/d in February, according to a Reuters survey based on shipping data and information from sources at oil companies, OPEC and consultants.
Nevertheless, Commerzbank strategists maintained OPEC "continues to produce more than is needed." The "call" on OPEC - the amount of crude required from the organization - is currently estimated at below 30 million b/d, according to Commerzbank. "Further supply is likely to reach the market in the coming weeks."
Tom James, Director & Co-Founder of Navitas Resources, said the second quarter is typically a soft patch for crude demand, providing another bearish pressure point for the market.
"You see refineries taking time to do maintenance so traditionally it's a softer period for the market and for crude demand," James said. "Without an escalation in the Ukraine situation, i.e. into real oil or gas flows being halted, the market will struggle to move higher from current levels at this time of year."
UBS strategists noted that while oil markets were increasingly taking supply-side risks in their stride, investors should not be complacent.
"Considering the potential supply risks of Russia and Venezuela and the limited global capacity - 2.5-3 million b/d of spare crude,or around 3 percent of global production - to counterbalance new supply outages, investors should not underestimate how quickly a supply risk premium of $10-15 a barrel for Brent crude oil can build up from current levels," UBS commodity strategists Dominic Schniderand Giovanni Staunovo said in emailed comments to CNBC.
Meanwhile, softer growth indicators from China - the world's second-largest economy - have been a drag on oil markets this week, with Brent crude settling at a five-month low of $105.62 on Tuesday while its U.S. counterpart slipped slightly below $100.
Deutsche Bank said weaker Chinese oil demand will be mitigated by stronger U.S. consumption underpinned by a strengthening economy.
"A much sharper than anticipated improvement in U.S. demand growth" has helped pick up the slack from China, wrote Deutsche's Lucas Herrmann in an April 1 research report.
U.S. demand growth of "a somewhat staggering" 4.3 percent, or 800,000 b/d, across the final quarter of 2013 has continued into the first quarter of 2014, Herrmann said, adding latest U.S. Department of Energy data suggests year-on-year demand growth of around 2.4 percent.
Admittedly, the pace of demand growth has "no doubt been supported by the very cold North American winter," Herrmann said. Still, better demand prospects in the U.S. and Europe have led the International Energy Agency to lift 2014 global demand growth forecasts to 1.4 million b/d from 1.3 million prior.