Oil prices retreat in Asian trade on US crude stockpile report
Oil prices retreated in Asia Wednesday as traders focus on a U.S. crude stockpile report, a day after growing concerns over mainland China’s economy sparked a massive sell-off in shares of commodity firms.
As Asian stocks recovered from Tuesday’s rout, oil prices remain under pressure because demand growth continues to fall behind crude supply, analysts said.
U.S. benchmark West Texas Intermediate (WTI) for November delivery fell 28 cents to US$44.95 and Brent crude dropped 20 cents to US$48.03 a barrel in afternoon trade.
Both contracts closed higher on Tuesday after sinking on Monday along with equities following dismal industrial data that reignited doubts about China’s commodity- hungry economy.
“At the end of the day, the fundamentals of supply and demand remain intact,” said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
He said traders are training their sights on a report to be released later Wednesday on U.S. commercial crude stockpiles for the week ending Sept. 25. The report is a closely watched gauge for demand in the world’s top oil consuming nation.
Analysts expect the report to show lower stockpiles, in part due to an anticipated drop in U.S. crude production and low utilization rates by U.S. refineries.
Traders are also worried about the Chinese economic slowdown because of its impact on demand for raw resources, including oil.