Oil prices steadied on Monday following a sharp 7% drop last week, as investors sought direction amid concerns over slowing global demand and rising supplies. The recent decline marks one of the largest weekly losses in months, driven by weaker-than-expected economic data from key markets like China and the eurozone.

Despite the stabilization, market sentiment remains cautious, with analysts closely watching for any signs of recovery in global demand. Concerns about oversupply have also weighed on prices, as U.S. shale production continues to rise and OPEC+ output cuts have yet to provide the level of support many expected.

Traders are now eyeing upcoming economic reports and demand forecasts, particularly from China, which remains a critical driver of global energy consumption. If Chinese growth continues to slow, the pressure on oil prices could intensify further.

On the supply side, U.S. inventories remain elevated, adding to fears that the market could face further downward pressure if demand doesn’t pick up soon. OPEC+ will likely continue to play a balancing act, but questions remain about the group’s ability to enforce deeper cuts in the near term.

For now, oil’s recovery appears tentative, as the market waits for clearer signals about the global economy and the trajectory of energy demand.