Oil prices down in Asian trade ahead of report
Oil prices fell in Asia Tuesday as dealers focused on an upcoming U.S. energy report for clues about production and demand in the world’s top crude consumer amid abundant global supplies.
U.S. benchmark West Texas Intermediate (WTI) for September delivery fell 31 U.S. cents to US$44.65 while Brent crude for September eased 21 U.S. cents to US$50.20 in afternoon trade.
The U.S. Energy Information Administration will on Wednesday release the latest U.S. stockpiles report for the week to Aug. 7.
Analysts said dealers will focus on production after it rose by 52,000 barrels in the previous week, slightly offsetting a 4.4 million barrel drop in overall crude reserves that indicated healthy demand.
London-based research house Capital Economics said the main drivers pressuring oil prices were “signs of a recovery in U.S. production and buoyant OPEC supply.”
Dealers predict that a slowdown in U.S. output — and increased demand during the summer driving season — could whittle down a huge global glut. This has been a key reason for the collapse in prices from a peak of around US$120 in June last year.
The decision by the Organization of the Petroleum Exporting Countries (OPEC) to maintain its output level at around 30 million barrels a day despite sagging demand is also seen as a reason for the abundant supplies.
The move is seen as an attempt by the cartel’s kingpin Saudi Arabia to defend its market share as it fends off competition from U.S. shale oil.