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Oil near 6-1/2 year lows as China economy fears linger

Published 2015-08-25, 09:24 p/m
© Reuters.  Oil near 6-1/2 year lows as China economy fears linger
BNPP
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LCO
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CL
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* Fears over supply glut, hard landing in China economy
* Eyes on EIA data as API shows draw in crude inventory
* Iran to ramp up output; Nigeria to export highest volume
of 2015

By Meeyoung Cho
SEOUL, Aug 26 (Reuters) - Crude oil futures dipped on
Wednesday on fears of a hard landing for China's economy despite
central bank moves to bolster stumbling growth and concerns
about a supply glut.
U.S. stock futures resumed their descent in early Asian
trade and Asian shares were seen on the defensive on Wednesday
as monetary easing by China's central bank had limited success
in cheering up nervous investors. MKTS/GLOB
Brent LCOc1 lost 10 cents to $43.11 a barrel as of 0110
GMT after it settled up 52 cents at $43.21 a barrel in the
previous session.
U.S. October crude CLc1 fell 20 cents to $39.11 a barrel,
after finishing the previous session $1.07 higher at $39.31.
ANZ said in a note that China's rate cuts had calmed
commodity markets, but they remained cautious and gains would be
limited.
"The displacement of high cost supply from the United States
is taking much longer than expected, and it's likely to keep the
market substantially oversupplied in the short term," the bank
said.
U.S. crude stocks fell by 7.3 million barrels in the week to
Aug. 21 to 449.3 million, compared with analysts' expectations
for an increase of 1 million barrels as refinery runs increased,
data from industry group the American Petroleum Institute showed
on Tuesday. API/S
Official inventory data from the U.S. Energy Information
Administration is due on Wednesday. EIA/S
"While the rate of global oil stock build is still set to
decline, stocks will build for longer than initially
anticipated," BNP Paribas (PARIS:BNPP) said late on Tuesday,
"As such, any price improvement will most likely take place
from a lower starting point and the pace of any price
improvement is likely to be slower than previously assumed."
Reuters market analyst for commodities and energy technicals
Wang Tao said U.S. oil CLc1 may retest a support at $37.91 per
barrel. ID:nL4N111094
Iran will ramp up crude oil production and reclaim its lost
share of exports shortly after international sanctions on the
OPEC member are lifted, Iran's oil minister Bijan Zanganeh said
on Tuesday. ID:nL5N1101TI
Nigeria plans to export a total of at least 2.04 million
barrels per day (bpd) of crude oil in October, the highest level
this year, according to provisional loading programmes.
ID:nL5N1102EO
With oil falling further, support is growing among non-Gulf
members for action and even some Gulf officials are concerned
about the latest drop in prices. Policymakers in top OPEC
producer Saudi Arabia have remained publicly
silent. ID:nL5N10Z2P4

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