Oil prices retreat in Asian trade
Singapore : Oil prices retreated in Asia today as traders focus on US crude stockpile report, a day after growing concerns over China’s economy sparked a massive sell-off in shares of commodity firms.
As Asian stocks recovered from yesterday’s rout, oil prices remain under pressure because demand growth continues to fall behind crude supply, analysts said.
US benchmark West Texas Intermediate (WTI) for November delivery fell 44 cents to USD 44.79 and Brent crude dropped 36 cents to USD 47.87 a barrel in late-morning trade.
Both contracts closed higher yesterday 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 US commercial crude stockpiles for the week ending September 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 US crude production and low utilisation rates by US refineries.
Traders are also worried about the Chinese economic slowdown because of its impact on demand for raw resources, including oil.