Oil prices on the in­crease in Asian trade

The China Post - - BUSINESS INDEX & -

Oil rose in Asia Thurs­day as deal­ers di­gested a mixed U.S. energy re­port show­ing a dip in crude in­ven­to­ries, but barely any de­cline in pro­duc­tion de­spite sink­ing prices.

U.S. bench­mark West Texas In­ter­me­di­ate for Oc­to­ber de­liv­ery gained 87 cents to US$39.47 while Brent crude for Oc­to­ber rose US$1.01 to US$44.15 in af­ter­noon trade.

The U.S. Depart­ment of Energy said Wed­nes­day U.S. crude sup­plies un­ex­pect­edly fell by 5.5 mil­lion bar­rels for the week end­ing on Aug. 21, in­di­cat­ing healthy de­mand.

How­ever, U.S. crude pro­duc­tion slipped a scant 11,000 bar- rels a day in the same pe­riod, keep­ing out­put above 9.3 mil­lion bar­rels and not far from a decades-high pro­duc­tion level.

In another bear­ish in­di­ca­tor, ga­so­line sup­plies in­creased by 1.7 mil­lion bar­rels, adding to con­cerns of a global glut of energy sup­plies.

De­spite the gains in Asian trad­ing, Sin­ga­pore’s United Over­seas Bank said the mixed re­port com­pounded “neg­a­tive sen­ti­ment af­ter world­wide falls in eq­ui­ties that helped drag fuel prices to six and a half year lows.”

Oil prices hit their low­est lev­els since early 2009 on Mon­day over con­cerns main­land China’s slow­ing econ­omy will curb de­mand for the com­modi­ties that have helped drive its growth over the past three decades.

The de­val­u­a­tion of the yuan two weeks ago largely fu­elled the eco­nomic fears that sparked the rout, which also saw heavy losses in most global com­modi­ties and eq­uity mar­kets.

Lon­don- based Cap­i­tal Eco­nom­ics pre­dicted a re­bound in com­modi­ties mar­kets, say­ing that “much of the bad news was al­ready baked in the cake be­fore the latest sell-off.”

“We think com­mod­ity prices will now sta­bi­lize and per­haps even edge higher and we dis­agree with the dooms­day sce­nar­ios for China’s econ­omy that are cur­rently do­ing the rounds,” it said.

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