Oil prices extend losses in Asian trade
Singapore: Oil prices extended losses in Asia today as dealers digested weak US and Chinese manufacturing data, while expectations of a bearish US stockpiles report also weighed, analysts said.
US benchmark West Texas Intermediate (WTI) for October delivery fell USD 1.14 to USD 44.27 while Brent crude for October sank 91 cents to USD 48.65 in late-morning trade.
WTI sank USD 3.79 and Brent lost USD 4.59 yesterday after China and the United States, the world’s top two crude consumers, posted weak factory activity data.
Beijing’s official Purchasing Managers index (PMI) for the manufacturing sector slumped to a three-year low of 49.7 in August from 50.0 in July. A reading below 50 indicates contraction.
The US Institute for Supply Management PMI fell to 51.1, the lowest level so far this year, from 52.7 in July.
“With manufacturing PMI not showing results, markets turned bearish again,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.
“The market has been flocking between the bulls and the bears, causing huge volatility in oil prices.”
Ang said dealers expect a further drop in oil prices after the release of the official US stockpiles report for the week to August 28 later today.
Energy analysts are predicting a 900,000-barrel jump in US supplies, Bloomberg News reported. A jump in stockpiles typically signals weaker demand.
US overall crude reserves remain at lofty levels for thistime of the year. Dealers had been hoping that an uptick in US demand, coupled with a slowdown in output, could whittle down the huge global supplies that were a key reason for the collapse in prices from around USD 120 in June last year