Oil prices ex­tended their de­cline in Asia Fri­day af­ter the OPEC car­tel in­di­cated that cur­rent lofty out­put lev­els will re­main, while a stronger dol­lar is also caus­ing down­ward pres­sure.

US bench­mark West Texas In­ter­me­di­ate for Septem­ber de­liv­ery fell 36 cents to $48.16 and Brent crude for Septem­ber shed 29 cents to $53.02 a bar­rel in late-morn­ing trade. Both con­tracts tum­bled on Thurs­day, snap­ping two con­sec­u­tive days of gains.

Ab­dul­lah El- Badri, Sec­re­tary Gen­eral of the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries, said the group would not cut out­put in re­sponse to lower prices.

Speak­ing in Moscow af­ter meet­ing Rus­sia s energy min­is­ter on Thurs­day, he said the car­tel is "not ready" to cut pro­duc­tion, which is cur­rently at around 30 mil­lion bar­rels per day.

An­a­lysts said the state­ment shows OPEC is de­ter­mined to de­fend its mar­ket share as it fends off com­pe­ti­tion from US shale oil.

"OPEC is telling the mar­ket that cuts will not come from them," said Daniel Ang, an in­vest­ment an­a­lyst with Phillip Fu­tures in Sin­ga­pore.

OPEC is "em­pha­sis­ing that it is fight­ing for mar­ket share", he added. At its most re­cent meet­ing in Vi­enna in June OPEC kept its out­put lev­els de­spite a sup- ply glut, which has de­pressed oil prices.

Prices are also un­der pres­sure by the strength of the US cur­rency, which makes dol­lar-priced oil more ex­pen­sive to hold­ers of weaker units, damp­en­ing de­mand. The has picked up steam on ex­pec­ta­tions the Fed­eral Re­serve will raise US in­ter­est rates later this year. The chances of a Septem­ber lift were raised Thurs­day af­ter data showed the US econ­omy ex­panded 2.3 per­cent in April-June, the strong­est pace since the third quar­ter of 2014.

"The sec­ond-quar­ter GDP data sup­port the Fed s more up­beat tone on eco­nomic con­di­tions and sug­gests that the econ­omy could cope with higher in­ter­est rates," re­search firm Cap­i­tal Eco­nom­ics said.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.