Find out more at btsub.sg/btdeal
You are here
Oil falls amid warnings of retreat to US$40 on rocky rebalance
[SEOUL] Oil fell amid forecasts prices may slide toward US$40 a barrel as consumption falters and halted supplies return.
Futures fell as much as 1.4 per cent, paring a 2.1 per cent gain Thursday. Analysts from BNP Paribas SA to JBC Energy GmbH warned prices may sink towards US$40 a barrel amid a global glut of supply and weakening demand.
Crude rose Thursday as US stocks extended gains at an all-time high amid corporate results that pointed to resilience in the global economy.
Oil has traded between about US$44 and US$52 a barrel since early June after almost doubling from a 12-year low in February amid a spate of supply disruptions and falling US output.
Prices have been whipsawed this week, pulled down by US fuel data that signaled faltering demand and rallying when global equity markets advance and a weakening dollar bolstered commodities.
"Oil is slowly rebalancing in a zigzag pattern because when prices rise, producers in the US raise output, which will again push prices down," Hong Sung Ki, a Seoul-based commodities analyst at Samsung Futures Inc, said by phone.
"Market sentiment is quite bearish at the moment on concerns over recovering US production and low refinery processing rates."
West Texas Intermediate crude for August delivery fell as much as 63 US cents to US$45.05 a barrel on the New York Mercantile Exchange and traded at US$45.10 at 10:58 am Tokyo time.
The grade rose 93 US cents to settle at US$45.68 on Thursday. Total volume traded was about 46 per cent below the 100-day average.
Brent for September settlement dropped as much as 60 US cents, or 1.3 per cent, to US$46.77 a barrel on the London-based ICE Futures Europe exchange. The contract increased US$1.11 to US$47.37 on Thursday.
The global benchmark crude traded at a 98-US cent premium to WTI for September delivery.