Oil down in Asia on Iraq ex­ports

The Myanmar Times - - International Business -

OIL prices eased in Asia yes­ter­day, end­ing a seven-day run, fol­low­ing news that Iraq will boost crude ex­ports, while the dol­lar strength­ened on spec­u­la­tion the Fed­eral Reserve could hike in­ter­est rates this year. The com­mod­ity en­tered a bull mar­ket last week – after ris­ing more than 20 per­cent from re­cent lows be­low US$40 a bar­rel – on hopes pro­duc­ers will take ac­tion to ease the sup­ply glut.

But gains were chipped in Asia after Bloomberg re­ported that Iraq, OPEC’s sec­ond-big­gest pro­ducer, will in­crease ex­ports by 5pc after an agree­ment to re­sume ship­ments from three oil fields.

AUS bench­mark West Texas In­ter­me­di­ate for de­liv­ery in Septem­ber was down 97 cents, or 2pc, to $47.55 a bar­rel. Brent crude fell 98cents, or 1.93pc, to $49.90.

“Oil is buf­feted by US dol­lar gains and news that Iraq plans to boost its ex­ports, stok­ing fears that the sup­ply glut will worsen,” said an­a­lyst Bernard Aw.

Both main con­tracts surged last week as it emerged that the OPEC pro­duc­ers club and its rivals will meet next month, with spec­u­la­tion they could dis­cuss ways to tackle an over­sup­plied mar­ket.

How­ever, de­spite the rally in oil prices an­a­lysts are doubt­ful a deal to freeze out­put would be reached.

“The stars re­main misaligned for an OPEC/non-OPEC freeze agree­ment, but it is ben­e­fi­cial for pro­duc­ers to talk,” Bri­tish bank Bar­clays said in a mar­ket anal­y­sis.

“Oil prices will likely ex­pe­ri­ence an­other short-term dip in the com­ing weeks be­fore more sus­tain­ably mov­ing to av­er­age $50” in the fourth quar­ter. –

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