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Oil prices fall on supply glut

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Oil prices fell again on Thursday after an up and down week, as traders tracked developments over China and an oversupplied market.

[LONDON] Oil prices fell again on Thursday after an up and down week, as traders tracked developments over China and an oversupplied market.

Brent North Sea crude for delivery in September dipped 61 cents to stand at US$49.05 a barrel in London late afternoon deals after earlier rising 16 cents.

US benchmark West Texas Intermediate for September dropped US$1.07 to US$42.23 a barrel compared with Wednesday's close.

New York oil prices on Wednesday edged up from six-year low points as US oil supplies declined and the dollar retreated.

The US Department of Energy Wednesday said the estimated amount of crude oil in the country's commercial storage tanks tumbled 1.7 million barrels to 453.6 million barrels in the week ending August 7.

The report also said US domestic oil production fell 70,000 barrels a day to about 9.4 million barrels, which is positive for oil prices in an oversupplied market.

The dollar has meanwhile taken a hit after China's surprise move to devalue the yuan, with analysts saying this could delay plans by the US central bank to raise interest rates, a move previously expected as early as September.

A weaker US currency makes dollar-priced oil cheaper for holders of other units, perking up demand and supporting prices.

But analysts said oil prices were being weighed down by continued concerns over a glut in the world crude market.

"The market is just bearish overall," said Daniel Ang, an investment analyst with Phillip Futures in Singapore.

"There's still no big change to the supply and demand fundamentals in the oil market," he told AFP.

AFP