Oil prices down in Asian trade ahead of re­port

The China Post - - BUSINESS INDEX & -

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.

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