Oil prices re­bound in Asian trade

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Oil prices re­bounded in Asia Tues­day af­ter fall­ing steeply in the pre­vi­ous ses­sion ow­ing to weak Chi­nese and US man­u­fac­tur­ing and con­tin­ued wor­ries about the global sup­ply glut, an­a­lysts said.

US bench­mark West Texas In­ter­me­di­ate (WTI) for Septem­ber de­liv­ery rose 31 cents to $45.48 while Brent crude for Septem­ber was up 32 cents to $49.84 in mid-morn­ing trade. WTI plum­meted $1.95 while Brent tum­bled $2.69 on Mon­day, ex­tend­ing sharp losses of more than two per­cent on Fri­day. An­a­lysts said the small gains in Asian trad­ing were likely to be capped as deal­ers fo­cused on slug­gish man- ufac­tur­ing data from energy guz­zlers China and the United States.

A key pri­vate eco­nomic in­di­ca­tor on the Chi­nese man­u­fac­tur­ing sec­tor, Caixin s pur­chas­ing man­agers in­dex, showed a plunge in July to a two-year low of 47.8, deeper into con­trac­tion ter­ri­tory. A read­ing of 50 marks the line be­tween growth and con­trac­tion. The of­fi­cial PMI showed a drop to 50.0 in July from 50.2 in June.

In the US, the In­sti­tute for Sup­ply Man­age­ment s pur­chas­ing man­agers in­dex showed man­u­fac­tur­ing ac­tiv­ity cooled to 52.7 in July from 53.5 in June. "Weak­en­ing growth in the global econ­omy piled on the pres­sure for com­modi­ties," said Bernard Aw, mar­ket strate­gist at IG Mar­kets in Sin­ga­pore. "Jux­ta­pos­ing the wan­ing de­mand in crude oil with per­sis­tent upticks in sup­ply, the over­hang seems to be widen­ing," he added. Long-run­ning wor­ries about the global sup­ply glut were ex­ac­er­bated by com­ments from the Ira­nian oil min­is­ter Bi­jan Zan­ganeh on the Is­lamic re­pub­lic s plans to ramp up oil ex­ports once sanc­tions are lifted, as part of the coun­try s deal with six ma­jor pow­ers to limit its nu­clear pro­gramme.

The price of crude has steadily fallen from around $120 a bar­rel in June last year, largely due to over­sup­ply caused by the OPEC oil car­tel s re­fusal to trim lofty out­put lev­els and surg­ing US shale pro­duc­tion.

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