Oil prices higher in Asian trade on weak US dollar
Oil prices edged higher in Asia Tuesday on a weaker U. S. dollar but gains were capped by concerns about tepid Chinese demand and OPEC’s decision to maintain its current output levels, analysts said.
U. S. benchmark West Texas Intermediate for July delivery rose 29 cents to US$ 58.43 while Brent crude for July gained 25 cents to US$ 62.94 in afternoon trade.
The U. S. dollar edged down to 124.44 yen in Asian trade from 124.47 yen in New York well off the 125.56 yen seen on Friday.
A weaker greenback makes dollar- priced oil cheaper for buyers using weaker currencies, boosting demand and pushing global prices higher.
However, Singapore’s United Overseas Bank said prices were weighed by “a slump in Chinese demand and worries that OPEC’s decision to pump with- out restraint could prolong the current supply glut.”
China released data Tuesday showing inflation eased in May, missing expectations and reigniting worries the country could tip into a deflationary spiral.
The figures came a day after officials said imports plunged last month while exports also fell, the latest indicators pointing to a continued slowdown in the world’s top energy consumer.