Oil prices rise in Asia but China, Greece cap gains
Singapore: Oil prices rose in Asia today but remain subdued by concerns about the impact on demand from the stock market rout in China and Greece’s debt crisis, analysts said.
Robust commercial crude inventories in the United States added to the pressure in the face of a supply glut, they said.
US benchmark West Texas Intermediate for August delivery was up 52 cents at USD 52.17 and Brent crude for August rose 57 cents to USD 57.62 a barrel in late-morning trade following recent sharp losses.
“Rising uncertainties from the Greek debt bailout and China’s stock market turmoil put global demand at risk,” said Sanjeev Gupta, who heads the Asia-Pacific Oil and Gas practice at professional services organisation EY.
“Commodity prices fell sharply this week with crude prices suffering their largest sell-off in five months, slumping more than 8.0 per cent.”
Chinese stocks have taken a severe beating after government measures failed to staunch the bloodletting that has wiped out around a third of China’s main share market in under a month.
Shanghai stocks traded wildly this morning, as the government beefed up the measures to arrest the stock market slump in the world’s top energy consumer.
“A stock market bust can… leave a lot of people out of pocket and that could dampen domestic spending, which has already been waning,” said Jasper Lawler, market analyst at CMC Markets.
“Also, smaller market capitalisations will mean Chinese businesses cannot borrow as much for expansion, limiting employment opportunities and further curtailing spending,” he said in a market commentary.