Oil prices fall in Asia trade on over­sup­ply fears

The China Post - - BUSINESS INDEX & -

Oil prices fell in Asian trade on Mon­day, ex­tend­ing weeks of losses af­ter a U.S. re­port stoked ex­pec­ta­tions of a global glut.

U.S. bench­mark West Texas In­ter­me­di­ate (WTI) for Septem­ber de­liv­ery was at US$43.76, down from US$43.87 on Fri­day in New York — its low­est close since March 17.

Brent crude for Septem­ber was trad­ing at US$48.50 af­ter end­ing at US$48.61 on Fri­day.

“It’s still a sup­ply story,” Jona- than Bar­ratt, chief in­vest­ment of­fi­cer at Ay­ers Al­liance Se­cu­ri­ties, told Bloomberg News.

“There is not a lot of up­side for oil.”

Con­cerns about a global sup­ply glut were stoked on Fri­day when Baker Hughes said the num­ber of U.S. drilling rigs rose for the third straight week.

The count rose to 670, the oil­field ser­vices firm re­ported, just days af­ter the U.S. gov­ern­ment re­ported an in­crease in oil pro­duc­tion in the world’s top con­sumer.

A glut in crude oil sup­ply is seen as the main driver for a sharp de­cline in oil prices that has seen crude slump to al­most a third of its mid-2014 peaks.

News of ris­ing U.S. pro­duc­tion comes as top pro­duc­ing car­tel OPEC has re­fused to cut out­put, and as in­vestors wait for Iran to ramp up ex­ports af­ter a ma­jor deal over its nu­clear pro­gram last month.

In ex­change for curb­ing its nu­clear ac­tiv­i­ties, Tehran will see the lift­ing of sanc­tions, which have slashed its oil ex­ports.

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