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US oil pulled lower by global stocks; on track for eighth weekly decline
[SINGAPORE] Oil prices resumed their downward trend in early Asian trade on Friday with the US benchmark on track for its eighth weekly decline, pulled lower by weaker global stock markets and concerns over an economic slowdown in China.
US crude for October delivery was 23 cents lower at $41.09 at 0058 GMT. The September contract, which expired on Thursday, ended 34 cents higher.
The US benchmark hit 6-1/2 year lows near US$40 a barrel on Wednesday and Brent crude for October delivery was down 29 cents at US$46.33, after settling 54 cents lower in the previous session.
Asian stocks fell on Friday morning, following Wall Street down as fears took hold of a China-led deceleration in global growth. Chinese manufacturing data due later Friday will offer the latest glimpse into the health of the world's second largest economy.
The dollar continued retreating on shrinking expectations of an US interest rate hike in September, providing some support for oil prices.
Despite the rout in oil prices, some mutual funds keep ploughing money into oil exploration and production companies in the United States in a bet that production will retreat sharply over the next 12 months, setting the stage for a rebound towards US$65-70 per barrel.