Oil prices down in Asian trade
Singapore: Oil prices fell in Asia today as dealers focused on an upcoming US energy report for clues about production and demand levels in the world’s top crude consumer amid abundant global supplies.
US benchmark West Texas Intermediate for September delivery fell 47 cents to USD 44.49 while Brent crude for September eased 45 cents to USD 49.96 in mid-morning trade.
The US Energy Information Administration will release the latest US stockpiles report for the week to August 7 tomorrow.
Analysts said dealers will focus on production after it rose 52,000 in the previous week, slightly offsetting a 4.4 million drop in overall crude reserves that indicated healthy demand.
London-based research house Capital Economics said the main drivers pressuring oil prices were “signs of a recovery in US production and buoyant OPEC supply”.
Dealers predict a slowdown in US output — and increased demand during the summer driving season — could whittle down a huge global glut that has been a key reason prices collapsed from a peak of around USD 120 in June last year.
The Organisation of the Petroleum Export Countries’ (OPEC) decision to maintain its output level at around 30 million barrels a day despite sagging demand is also seen as a reason for the abundant supplies.
The move is seen as an attempt by the producer cartel’s kingpin Saudi Arabia to defend its market share as it fends off competition from US shale oil.
That policy may be working, with the latest drop in prices prompting “more Western oil companies to shelve investment plans, which will feed back into slower growth in non-OPEC production,” Capital Economics said.