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Weak fundamentals pull down oil prices after short-lived rally
[SINGAPORE] Oil prices slumped in early Asian trading on Tuesday following a jump in the previous session, underscoring the market view that fundamentals are too weak to warrant a push much higher.
Crude oil futures jumped almost 4 per cent on Monday, moving away from January-lows, as speculative traders increased their net-long positions, but prices slumped again on Tuesday morning and remain over a quarter below their most recent peaks in May.
Front-month Brent futures were at US$50.19 a barrel at 0048 GMT, down 22 cents from their last close. US crude fell 19 cents to US$44.77.
The low prices come on the back of weak supply and demand fundamentals, with output from key producers like the Organization of the Petroleum Exporting Countries (Opec), Russia and the United States near record highs just as demand growth slows.
In China, the world's No.2 economy and oil consumer, exports tumbled 8.3 per cent in July in their biggest fall in four months, threatening the government's 7 per cent economic growth target for this year, already the lowest in decades.