Price of oil down in Asian trade

The China Post - - WORLD BUSINESS -

Oil prices fell in Asia Thurs­day af­ter a rise in U. S. out­put to more than 30- year highs fanned fears over a global sup­ply glut, ahead of the OPEC car­tel’s meet­ing that is ex­pected to see it main­tain gen­er­ous pro­duc­tion lev­els.

U. S. bench­mark West Texas In­ter­me­di­ate ( WTI) for July de­liv­ery fell two cents to US$ 59.62 while Brent eased five cents to US$ 63.75 in af­ter­noon trade.

An­a­lysts said deal­ers are con- cerned that pro­duc­ers are not pulling back on out­put de­spite an over­sup­ply that has seen prices slump al­most 50 per­cent over the past year.

The U. S. Depart­ment of En­ergy’s lat­est petroleum re­port Wed­nes­day showed U. S. out­put rose 20,000 bar­rels a day to 9.59 mil­lion in the week to May 29 — the sec­ond con­sec­u­tive gain and the high­est since Jan­uary 1983.

At its last meet­ing in Novem­ber, the car­tel, which pumps around 30 per­cent of the world’s oil, kept its of­fi­cial pro­duc­tion tar­get of 30 mil­lion bar­rels per day, in a move seen as try­ing drive high- cost U. S. shale oil pro­duc­ers out of the mar­ket.

That de­ci­sion ini­tially con­trib­uted to prices slump­ing to sixyear lows in Jan­uary but some an­a­lysts say the strat­egy, backed by OPEC king­pin Saudi Ara­bia, has paid off as U. S. shale oil pro­duc­ers have been squeezed and crude has re­cov­ered in re­cent months.

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