Oil prices fall on OPEC comments; investors await U.S. wage data

By Keith Wallis
SINGAPORE, July 31 (Reuters) - Oil prices fell in Asian
trade on Friday as concern over global oversupply intensified
after the head of oil producers' cartel OPEC indicated there
would be no cut-back in production, although a fall in the U.S.
dollar put a floor under prices.
Brent is heading for its fifth weekly fall after prices shed
gains early in the session and reversed into negative territory.
Suggesting there would be no reduction in oil output among
member states, Abdullah al-Badri, secretary-general of the
Organisation of the Petroleum Exporting Countries, said on
Thursday that rising demand would prevent a further fall in oil
prices. ID:nL5N10A2RT
Badri added that even if OPEC had cut output by as much as 2
million barrels per day (bpd), it would not have helped prices.
OPEC members produced around 31.25 million barrels per day
in the second quarter, about 3 million more than daily demand, a
Reuters survey showed this week. ID:nL5N1083OI
Investors were waiting for the release of U.S. employment
and eurozone wage and inflation data later on Friday, said Ben
Le Brun, a market analyst at Sydney's OptionsXpress.
The U.S. data could provide a further indication of whether
the U.S. Federal Reserve will raise interest rates in September.
"Prices will be range-bound between now and the release of
wage and wage inflation data," Le Brun said.
The U.S. "wage inflation number is a key piece of the jigsaw
in terms of (Fed chair) Janet Yellen's interest rate puzzle", he
added.
Oil prices got some support from a weaker dollar. The dollar
index .DXY fell against a basket of currencies in early Asian
trade although it was still near one-week highs.
It touched those highs after data overnight showed U.S.
gross domestic product expanded at a 2.3 percent annual rate in
the second quarter. First-quarter data was revised to show 0.6
percent growth rather than a 0.2 percent contraction.
ID:nLNNUIEBDP
Investors were also digesting a decision by the U.S. Senate
Energy Committee to approve a bill to lift a 40-year-old ban on
crude oil exports, although it still faces an uphill battle in
getting passed by the full Senate. ID:nL1N10A2JX
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OPEC surplus:
http://link.reuters.com/tyv52w
For a 24-hr chart analysis on Brent:
http://graphics.thomsonreuters.com/US/2/PVB_20153107090721.png
For a 24-hr chart analysis on U.S. oil:
http://graphics.thomsonreuters.com/US/2/PVB_20153107084252.png
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