Oil prices slide to fresh lows in Asian trade


Oil prices ex­tended losses in Asia on Wed­nes­day as deal­ers wor­ried about China s econ­omy fol­low­ing its sur­prise cur­rency de­val­u­a­tion, while over­sup­ply con­cerns also added to down­ward pres­sure, an­a­lysts said.

US bench­mark West Texas In­ter­me­di­ate (WTI) for Septem­ber de­liv­ery fell nine cents to $42.99 while Brent crude for Septem­ber slipped 26 cents to $48.92 in af­ter­noon trade. WTI on Tues­day sank to its low­est close since March 2009, while Brent also fell in Lon­don, af­ter China s cen­tral bank moved to de­value its cur­rency by nearly two per­cent against the US dol­lar.

The Peo­ple s Bank of China again low­ered the daily fix that sets the value of the Chi­nese cur­rency against the green­back on Wed­nes­day by 1.62 per­cent, send­ing a new shock­wave through fi­nan­cial mar­kets.

"The Chi­nese yuan con­tin­ues to weaken for the sec­ond day, which could sug­gest fur­ther weak­en­ing of oil prices," said Daniel Ang, an in­vest­ment an­a­lyst at Phillip Fu­tures in Sin­ga­pore.

In­vestors fear Bei­jing s move sig­nalled con­cerns over growth in the world s sec­ond-largest econ­omy and top energy con­sumer, which came af­ter data pub­lished over the week­end showed a slump in Chi­nese trade. It also pushed up the green­back, which strength­ened fur­ther against Asian cur­ren­cies on Wed­nes­day, hurt­ing dol­lar-de­nom­i­nated com­mod­ity prices by mak­ing them more ex­pen­sive for in­ter­na­tional buy­ers.

Ang said prices were also un­der pres­sure af­ter the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) said out­put in July rose by 100,700 bar­rels per day from the pre­vi­ous month to 31.5 mil­lion bar­rels per day. "An in­crease in OPEC pro­duc­tion is cer­tainly not ideal for the over­sup­plied mar­ket at this point in time," Ang said.

The pro­ducer car­tel s re­fusal to cut its out­put level de­spite sag­ging de­mand is seen as a rea­son for a pro­longed global over­sup­ply, which has seen prices fall to al­most a third of their mid-2014 peak.

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