Brent, US crude fall on oversupply, poor China data

A man fills up his auto at a petrol station in Rome January 6, 2015.

Crude oil futures fell 1.24 per cent to Rs 2,789 per barrel today as speculators trimmed positions amid a weak trend in Asian trade.

US benchmark West Texas Intermediate (WTI) for September delivery was at $43.57, down from $43.87 on Friday in New York – its lowest close since March 17.

Brent was down 22 cents at US$48.39 (RM190) a barrel at 0130 GMT, after touching a more than six-month low of US$48.26.

Investors predict crude prices will remain under pressure for the rest of the year, particularly after trade and inflation data added to concerns about China’s economy over the weekend.

Producer prices in July were at the lowest point since late 2009, during the aftermath of the global financial crisis, and have been sliding continuously for more than three years.

“That is weighing on oil prices regardless of the fact that oil imports were very strong”.

Oil traded near the lowest level in nearly five months in New York as a rebound in U.S. drilling signaled production is withstanding the slump in prices.

The Indian basket of worldwide crude oil continued to rule below the crucial level of 50 dollar per barrel, on the back of subdued global demand.

Olivier Jakob, an oil analyst at Petromatrix in Switzerland, cited the fact that the supertanker Sea King, which set off for South Korea with North Sea Forties crude in July, has since stayed in Europe. The number of rigs seeking oil rose by six to 670 for a third weekly gain, Baker Hughes data shows.

Analysts said the negative market sentiment was likely to continue until the supply side started to react.

Drillers in the U.S., the world’s biggest oil consumer, have added rigs to fields for the fifth weekly gain in six, Bakers Hughes said on its website.

“We are also struggling to find enough bullish arguments to maintain $75 a barrel as our price assumption for 2016 and $80 a barrel for 2017”, the bank said in a report.