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Oil prices down in Asia

Oil prices

Singapore:  Oil prices were down in Asia today as investors waited for the results of a US central bank meeting and a closely-watched report on crude inventories in the world’s biggest economy.

Worries over the Chinese economy after a rout in the country’s stock market and a global crude oversupply were also keeping investors at bay, analysts said.

US benchmark West Texas Intermediate for September delivery fell nine cents to USD 47.89 and Brent crude for September gave up 12 cents to USD 53.18 a barrel in late-morning trade.

The policy-setting Federal Open Market Committee (FOMC) of the US central bank will issue a statement at the end of a two-day meeting today, and investors are keeping an eye out for clearer signs on the timing of a US interest rate increase.

A rate rise will boost the greenback, making dollar- priced oil more expensive to holders of weaker currencies, hurting demand and helping push crude prices lower.

Investors will “pay close attention to the text of the FOMC statement for any confirmation/insights for the timeline of the first rate hike,” Singapore’s United Overseas Bank said in a note.

“I feel that (Federal Reserve chief Janet) Yellen will continue to lay the ground for an imminent interest rate increase,” said Bernard Aw, market strategist at IG Markets Singapore.

“We may see a modestly upbeat spin on economic prospects in the policy statement, which would underpin expectations of rate hike this year.”

The market is also waiting for data later today of last week’s US crude inventories as American oil drillers ramp up production despite the supply glut that has depressed prices.

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