Oil prices fall on profit-taking, rate hike uncertainty

31 Aug 2015 | Author: | No comments yet »

Oil Down With Markets Off to Shaky Start.

Tokyo – Oil prices fell in Asia on Monday, coming under pressure as dealers took profits from huge gains in the previous session and tried to gauge the outlook for the US economy and its taste for crude. The US benchmark, West Texas Intermediate for October delivery, eased 79 cents to $44.43 while Brent crude for October fell $1.00 to $49.05 in late-morning trade. WTI jumped $2.66 (6.3 percent) on Friday, capping its strongest weekly increase in four and a half years, while Brent surged $2.49 (5.2 percent) after prices plunged on concerns about China’s faltering economy.

Oil is holding losses after a slide this month below $40 a barrel, the lowest since February 2009, on concern slowing demand in the U.S. and China will leave the global market oversupplied. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $44.36 a barrel at 0351 GMT, down $0.86 in the Globex electronic session. Oil has been on a roller-coaster ride in recent weeks over fears of a harder-than-expected slowdown in China, the world’s top energy importer, at a time when world markets are awash with supplies.

Dealers are closely monitoring fresh Saudi-led air raids in Yemen against Shi’a Huthi rebels on Sunday, amid fears that the crisis in the country could threaten key crude producers in the Middle East. On Monday, oil took cues from a softer start by Asian markets, with the Shanghai Composite Index down around 2% after Beijing placed a 16 trillion yuan ($2.506 trillion) cap on local government debt over the weekend, the latest move to address a slowing economy. “It is now widely accepted that China is in the midst of a major slowdown in both economic growth and energy demand,” price-reporting agency Platts said in a report, adding that the near-term outlook for China’s crude imports is slightly more optimistic than widely expected. “We are still not out of the woods despite the hike in oil prices. Moreover, if global oil production doesn’t decline in line with slowing refinery operations, the surplus oil that goes into storage could pose a barrier to a Brent-price recovery to the $60 range, Mr.

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