Oil prices fall on profit taking, rate hike uncertainty

By Keith Wallis
SINGAPORE, Aug 31 (Reuters) - Oil prices fell in Asia on
Monday as traders took profits, snapping three days of gains
last week that saw the biggest two-day rally in six years.
"There is definitely a lot of profit taking going on," said
Daniel Ang, an analyst at Singapore's Phillip Futures.
"There is some readjustment in the positions taken by
traders," he said.
That came after Brent climbed 10 percent last week, while
U.S. crude finished the week up 12 percent.
Brent crude futures LCOc1 for October delivery fell 86
cents, or 1.7 percent, to $49.19 per barrel as 0156 GMT after
ending up $2.49, or 5 percent, in the previous session. The
contract slipped as low as $49.10 in early trade.
U.S. crude for October delivery CLc1 fell 70 cents to
$44.52 per barrel after settling up $2.66, or 6.3 percent, in
the previous session. It fell as low as $44.40 in early trade.
Mixed signals by U.S. financial policymakers last week on
whether the U.S. Federal Reserve would raise interest rates next
month was weighing on sentiment, Ang said.
Some Fed policymakers left the door open to a September
interest rate hike at an annual central bankers meeting on
Friday in comments that appeared to contradict those by the New
York Fed president earlier in the week who said a rate increase
seemed "less compelling". ID:nL1N1130HX ID:nL1N11110H
The comment came after turmoil in global markets in recent
weeks following China's currency devaluation and concerns over
its slowing economy.
Investors are eyeing a slew of economic data, including key
U.S. non-farm payroll data, later this week that could give
direction on a possible U.S. rate hike when Fed policy makers
meet on Sept. 16-17.
A rate hike is expected to support the U.S. dollar, making
commodities including oil more expensive for users of other
currencies.
The market is also watching the outcome of planned United
Nations-brokered talks later this week between Libya's warring
factions aimed at forming a unity government. ID:nL5N11330I
Libya posted a budget deficit of 4.5 billion dinars ($3.3
billion) in the first seven months of 2015 as oil production
fell and weak oil prices weighed, the Tripoli-based central bank
said on Sunday. ID:nL5N1150GL
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For a 24-hr chart on Brent:
http://graphics.thomsonreuters.com/US/2/PVB_20153108092955.png
For a 24-hr chart on U.S. oil:
http://graphics.thomsonreuters.com/US/2/PVB_20153108090719.png
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