UPDATE 3-Oil prices fall on profit-taking, rate hike uncertainty

31 Aug 2015 | Author: | No comments yet »

Oil Down With Markets Off to Shaky Start.

Oil prices fell in Asian trade Monday, reversing some of the gains made late last week amid concerns the latest rally in the oil and commodities markets would be difficult to sustain. 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. 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. Crude stockpiles in the country, the world’s largest oil consumer, were at 450.8 million barrels, about 90 million above the five-year seasonal average, according to the Energy Information Administration.

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