Oil prices down in Asian trade amid sup­ply glut

The China Post - - MARKETS -

Oil prices eased in Asia Tues­day as deal­ers weighed main­land China’s fresh mon­e­tary stim­u­lus against a sup­ply glut in the United States, an­a­lysts said.

U. S. bench­mark West Texas In­ter­me­di­ate for May de­liv­ery de­clined four cents to US$56.34 while Brent crude for June fell 11 cents to US$63.34 in af­ter­noon trade.

“The oil mar­ket is be­ing pushed in two di­rec­tions with the stim­u­lus ac­tion by China go­ing against the over­sup­ply sit­u­a­tion of crude in the United States,” Michael McCarthy, chief mar­ket strate­gist at CMC Mar- kets in Syd­ney, told AFP.

The Peo­ple’s Bank of China Sun­day cut by one per­cent­age point the amount of cash lenders must keep in re­serve, the sec­ond re­duc­tion this year and the lat­est eas­ing mea­sure aimed at kick­start­ing the world’s num­ber-two econ­omy. It has also cut in­ter­est rates twice since Novem­ber.

De­spite prices be­ing lifted slightly on hopes that the main­land Chi­nese stim­u­lus will spur de­mand, McCarthy said deal­ers re­mained con­cerned over surg­ing U.S. pro­duc­tion.

This is de­spite re­ports last week in­di­cat­ing that U.S. shale oil out­put may be on the cusp of eas­ing, he said.

“We ex­pect the U.S. stock­piles re­port (on Wed­nes­day) to re­flect an in­crease by three to four mil­lion bar­rels of pro­duc­tion this week, a re­bound from last week’s mod­est num­bers,” McCarthy said.

The Depart­ment of En­ergy last week said U.S. oil pro­duc­tion fell by 20,000 bar­rels to 9.38 mil­lion bar­rels per day, in the week end­ing April 10.

An­a­lysts said that decline should help ease the global crude over­sup­ply, which led to a col­lapse in prices of more than 50 per­cent be­tween June and Jan­uary.

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