Oil prices edge higher ahead of latest US energy re­port

The China Post - - BUSINESS INDEX & -

Oil prices turned higher Wed­nes­day but re­mained near six-year lows ahead of the latest U.S. energy re­port af­ter jit­ters over main­land China’s fal­ter­ing econ­omy spurred heavy losses this week, an­a­lysts said.

U.S. bench­mark West Texas In­ter­me­di­ate for Oc­to­ber de­liv­ery rose 28 cents to US$39.59 and Brent crude for Oc­to­ber added 29 cents to US$43.50 in late-morn­ing Asian trade.

Both con­tracts gained on bar­gain-hunt­ing Tues­day, af­ter plum­met­ing to their low­est lev­els since early 2009 a day ear­lier as in­vestors fret about fall­ing de­mand in the face of a world sup­ply glut.

“U.S. crude in­ven­to­ries con­tinue to be the weekly con­stant mover for oil prices in this pe­riod of stag­nant fun­da­men­tals,” said Daniel Ang, in­vest­ment an­a­lyst at Phillip Fu­tures in Sin­ga­pore.

“If in­ven­to­ries turn out lower than es­ti­mates, we may see prices get more sup­port and vice versa,” he added.

In­dus­try group Amer­i­can Petroleum In­sti­tute re­port­edly said Tues­day that U.S. crude re­serves shrank by 7.3 mil­lion bar­rels in the week to Aug. 21.

The num­bers sig­naled healthy de­mand in the world’s top crude con­sumer ahead of the more closely watched of­fi­cial stock­piles re­port from the U.S. Energy In­for­ma­tion Ad­min­is­tra­tion later Wed­nes­day.

Oil prices have come un­der pres­sure from con­cerns that China’s slow­ing econ­omy will curb de­mand for the com­modi­ties that have helped feed its as­ton­ish­ing growth over the past three decades.

The de­val­u­a­tion of the yuan two weeks ago fu­eled eco­nomic fears, spark­ing a slump in world eq­ui­ties send­ing com­modi­ties, as mea­sured by the Bloomberg Com­mod­ity In­dex of 22 raw ma­te­ri­als, to a 16-year-low on Mon­day.

Asian shares pushed higher in choppy trade on Wed­nes­day af­ter main­land China’s cen­tral bank cut its bench­mark lend­ing and de­posit in­ter­est rates in a bid to boost con­fi­dence.

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