Oil prices head for sev­enth weekly fall


Oil prices looked set for their sev­enth weekly fall in Asia Fri­day, with US crude tum­bling to fresh six-year lows as in­vestors wor­ried a global sup­ply glut is set to last.

US bench­mark West Texas In­ter­me­di­ate (WTI) for Septem­ber de­liv­ery dropped 24 cents to $41.99 in af­ter­noon trade, the low­est price since March 2009. Brent crude for Septem­ber, which ex­pires Fri­day, eased four cents to $49.18, re­main­ing be­low the psy­cho­log­i­cally im­por­tant $50 a bar­rel. Bernard Aw, mar­ket strate­gist at IG Mar­kets Sin­ga­pore, pre­dicted prices will re­main weak af­ter the In­ter­na­tional Energy Agency (IEA) said Wed­nes­day the global crude over­sup­ply will last through 2016.

"Crude oil should con­tinue to stay un­der pres­sure and likely to clock their sev­enth weekly losses," Aw said. "The ear­lier IEA as­sess­ment that the sup­ply glut sit­u­a­tion would be ex­tended be­yond 2015 con­tin­ues to con­trib­ute to the pes­simistic out­look for energy." Phillip Fu­tures in­vest­ment an­a­lyst Daniel Ang said "down­ward mo­men­tum ( is) still strong" for oil prices. "We have not iden­ti­fied much change to fun­da­men­tals for oil at the mo­ment," he said in a mar­ket com­men­tary.

In­vestors were also closely watch­ing the im­pact of China s de­val­u­a­tion of the yuan amid con­cerns it could trig­ger other Asian cen­tral banks to cut their cur­ren­cies to make their ex­ports more com­pet­i­tive. Fresh spec­u­la­tion that the US cen­tral bank will raise in­ter­est rates soon af­ter the re­lease of solid re­tail sales data has boosted the dol­lar, which is bad news for oil prices.

Oil is traded in the US cur­rency and any uptick in the dol­lar will make the com­mod­ity more ex­pen­sive, hurt­ing de­mand. Some an­a­lysts ex­pect the US Fed­eral Re­serve to hike in­ter­est rates as early as next month, but oth­ers say China s sud­den move to de­value the yuan this week could prompt the Fed to de­lay a rise.

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