Oil prices re­treat in Asian trade on US crude stock­pile re­port

The China Post - - BUSINESS INDEX & -

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.

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