Oil prices slide to fresh lows in Asian trade

The China Post - - BUSINESS INDEX & -

Oil prices ex­tended losses in Asia on Wed­nes­day as deal­ers wor­ried about main­land China’s econ­omy fol­low­ing its sur­prise cur­rency de­val­u­a­tion, while over­sup­ply con­cerns also added to down­ward pres­sure, an­a­lysts said.

U.S. bench­mark West Texas In­ter­me­di­ate (WTI) for Septem­ber de­liv­ery fell nine U.S. cents to US$42.99 while Brent crude for Septem­ber slipped 26 U.S. cents to US$48.92 in af­ter­noon trade.

WTI on Tues­day sank

to

its low­est close since March 2009, while Brent also fell in Lon­don, af­ter main­land China’s cen­tral bank moved to de­value its cur­rency by nearly two per­cent against the U.S. dol­lar.

Bei­jing’s move pushed up the green­back, which strength­ened fur­ther against Asian cur­ren­cies on Wed­nes­day, hurt­ing dol­lar­de­nom­i­nated com­mod­ity prices by mak­ing them more ex­pen­sive for in­ter­na­tional buy­ers.

Daniel Ang, an in­vest­ment an­a­lyst at Phillip Fu­tures in Sin­ga­pore said prices were also un­der pres­sure af­ter the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) said out­put in July rose by 100,700 bar­rels per day from the pre­vi­ous month to 31.5 mil­lion bar­rels per day.

The pro­ducer car­tel’s re­fusal to cut its out­put level de­spite sag­ging de­mand is seen as a rea­son for a pro­longed global over­sup­ply, which has seen prices fall to al­most a third of their mid-2014 peak.

An­a­lysts have said the move is 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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