You are here

Oil slips after rebound, dollar recovers against yen

You do not have access to view this Atom.

USoil150115.jpg
Oil prices resumed their downward spiral in Asia Thursday after rallying in the previous session on bargain-buying, while the dollar recovered after plunging in New York in reaction to disappointing US retail sales data.

[HONG KONG] Oil prices resumed their downward spiral in Asia Thursday after rallying in the previous session on bargain-buying, while the dollar recovered after plunging in New York in reaction to disappointing US retail sales data.

Crude enjoyed a rare five percent rally on Wednesday after plunging close to six-year lows, with analysts saying a pick-up had been expected after the commodity had crashed more than 50 per cent since June.

"Just so much of the bearish news has been priced in, it's just overdue for a correction," said John Kilduff, founding partner at hedge fund Again Capital.

However, the two main contracts retreated again Thursday as dealers digested news that US stockpiles had risen, adding to long-running concerns about a supply glut and weak demand.

sentifi.com

Market voices on:

US benchmark West Texas Intermediate for February delivery lost 32 US cents to US$48.16 and Brent fell 29 US cents to US$48.40.

In share trading Hong Kong added 0.28 per cent and Shanghai gained 0.25 per cent, with energy firms boosted by the oil rebound. However, Sydney lost 0.62 per cent, while Seoul was 0.19 per cent lower.

Tokyo added 1.46 per cent by the break as the yen weakened against the dollar.

"Given the return in oil prices and the deep sell-off (Wednesday) in Japanese stocks, the conditions could be there for a rebound," Mitsushige Akino, an executive officer at Ichiyoshi Asset Management in Tokyo, told Bloomberg News.

"The risk-off sentiment pushed the dollar-yen pair to as low as 116, but that was probably going too far in the short term." Regional traders took their lead from Wall Street, where the losses in crude mixed with figures showing a surprise 0.9 per cent fall in US retail sales in December.

The Dow fell 1.06 per cent, the S&P 500 shed 0.58 per cent and the Nasdaq lost 0.48 percent - marking a fourth-straight day of losses for US markets.

Adding to the downbeat sentiment was news that the World Bank had cut its growth forecast for the global economy, saying a US recovery was not enough to drag up other economies.

There was some good news, however, with the Federal Reserve saying in its Beige Book report that the US economy kept up "modest" or "moderate" growth in recent weeks.

On currency markets the dollar climbed after being hammered Wednesday in response to the poor retail sales figures, which could force the Fed to rethink its plan to hike interest rates by the middle of the year.

The greenback bought 117.71 yen early Thursday, up from 117.39 late in New York, where at one point it hit a low of 116.08.

The euro bought US$1.1774 and 138.62 yen Thursday against US$1.1782 and 138.30 yen in US trade.

Gold was US$1,230.33 an ounce, compared with US$1,238.84 on Tuesday.

AFP

grab

Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.

Find out more at btsub.sg/promo

Powered by GET.comGetCom