Oil prices on the decline ahead of US data

The China Post - - BUSINESS INDEX & -

Oil prices fell Wed­nes­day on profit-tak­ing af­ter the pre­vi­ous day’s sharp gains, while traders ex­pected an­other rise in U.S. crude in­ven­to­ries.

U.S. bench­mark West Texas In­ter­me­di­ate (WTI) for de­liv­ery in May de­clined US$1.13 to US$52.85 a bar­rel.

Brent North Sea crude for May dropped 69 U.S. cents to stand at US$58.41 a bar­rel around mid­day.

On Tues­day WTI rose US$1.84 and Brent was up 98 U.S. cents on eas­ing wor­ries that Ira­nian crude will flood the mar­ket soon af­ter last week’s nu­clear deal with the West. Also pro­vid­ing sup­port was news that Saudi Ara­bia had raised prices for Asia cit­ing in­creased de­mand, an­a­lysts said.

Daniel Ang, an in­vest­ment an­a­lyst with Phillip Fu­tures in Sin­ga­pore, said he saw el­e­ments of profit-tak­ing in Wed­nes­day’s trade, with an ex­pected rise in U.S. weekly crude in­ven­to­ries also damp­en­ing sen­ti­ment.

The U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion will re­lease its stock­piles re­port, a closely watched barom­e­ter of de­mand in the world’s top oil con­sum­ing na­tion, later Wed­nes­day.

“Fun­da­men­tals are still weak,” Ang said, re­fer­ring to soft de­mand amid the global crude over­sup­ply that has led to a col­lapse in prices since June.

Cap­i­tal Eco­nomics said in a mar­ket com­men­tary: “There is un­likely to be much ad­di­tional Ira­nian oil hit­ting the mar­ket this year, even if a full (nu­clear) deal is signed in June.

“Once sanc­tions have been lifted there could well be a surge in ex­ports in the first few months as Iran sells its stores of oil, but ramp­ing pro­duc­tion up to pre­vi­ous lev­els is likely to take ap­pre­cia­bly longer.”

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