Oil prices retreat in Asia over con­cerns about a global sup­ply dearth

The China Post - - MARKETS -

Oil prices fell on Mon­day on con­cern about a global sup­ply glut as OPEC pre­pares for a meet­ing at which it is ex­pected to main­tain out­put.

Amer­i­can bench­mark West Texas In­ter­me­di­ate (WTI) for July dropped 70 cents to US$59.60 a bar­rel, while Brent shed 73 cents to US$64.83.

Prices had jumped on Fri­day fol­low­ing a mixed U.S. stock­piles re­port. The United States Depart­ment of En­ergy re­vealed Thurs­day a healthy decline in crude oil and gaso­line re­serves — but also a rise in out­put that could ag­gra­vate the global over­sup­ply.

How­ever, deal­ers re­main wor­ried about de­mand as the global econ­omy strug­gles to pick up the pace.

The Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC), which pumps about a third of the world’s oil, is to meet for a pro­duc- tion gath­er­ing on Fri­day, at which it is tipped to en­dorse its cur­rent rate of pro­duc­tion.

The car­tel’s de­ci­sion in Novem­ber to keep out­put at 30 mil­lion bar­rels a day helped fuel a mas­sive sell-off that saw prices plunge more than 60 per­cent be­tween June and Jan­uary.

“Pro­duc­tion is go­ing to have to come down to pre­vent oil prices fall­ing away,” Ric Spooner, a chief an­a­lyst at CMC Mar­kets in Syd­ney, told Bloomberg News.

“Not only is Saudi Ara­bian out­put steady but we also saw U.S. pro­duc­tion flick­ing up again. That’s why we’re con­strained on the up­side.”

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