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Oil prices down in Asian trade

Oil prices

Singapore:  Crude prices edged lower in Asia today on worries about a global oversupply after a veteran former energy minister in Qatar warned OPEC members against cutting output unilaterally.

US benchmark West Texas Intermediate for June delivery fell eight cents to USD 59.17 while Brent crude for June eased 16 cents to USD 64.75 in late-morning trade.

Abdullah al-Attiyah, who led the energy portfolio in oil-rich Qatar for about two decades, yesterday said OPEC should first reach a binding agreement with non-members before reducing production.

“OPEC should not do anything because it is not the swing producer” of the past, Attiyah told reporters in Kuwait City.

“They cannot and will not cut (output) unless the main producers outside OPEC join forces,” he said.

The 12-nation Organisation of the Petroleum Exporting Countries in November maintained output levels despite tumbling prices.

The group, led by de-facto kingpin Saudi Arabia, pumps about 30 per cent of global crude.

Nicholas Teo, market analyst at CMC Markets in Singapore, said concerns over a persistent global oversupply “continue to put a cap on oil prices”.

Those worries were compounded by latest US data showing petroleum drilling is picking up in some areas.

The closely watched Baker Hughes US oil rig count fell by just 11 to 668 last week.

Dealers have been hoping that a slowdown in US shale output could help ease the build up of global crude reserves, which was a key reason for the collapse in prices of more than 50 per cent between June and January.

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