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Oil prices remain weak on Asia economy woes; shares in commodity firms tumble

Published 2015-09-28, 09:51 p/m
© Reuters.  Oil prices remain weak on Asia economy woes; shares in commodity firms tumble
LCO
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* Japan stock market at 8-mth lows over Asian economic fear
* Falling commodity markets hit trading houses hard

By Henning Gloystein
SINGAPORE, Sept 29 (Reuters) - Oil prices remained low in
early Asian trading on Tuesday following a slide of almost 3
percent the previous session, dragged down as concerns over
Asia's economic health mounted and as production remained high.
Brent crude futures LCOc1 were at $47.31 per barrel at
0138 GMT, down 3 cents from their last close and following a
more than 2.5-percent drop on Monday. U.S. West Texas
Intermediate (WTI) futures CLc1 were at $44.44 a barrel,
virtually unchanged from their last settlement.
Oil prices, along with most other commodities, have fallen
sharply recently, with crude futures losing almost 60 percent of
their value since June 2014.
Japanese stock markets, among the earliest to open in Asia,
slid to eight-month lows on Tuesday as global stocks came under
pressure from worries about economies in China and other
emerging markets. ID:nL4N11U5DE
"China's industrial profits declined 8.8 percent in August
from a year earlier, with the biggest drops concentrated in
producers of coal, oil and metals," ANZ said on Tuesday.
"These declining margins are likely to add to the global
deflationary story, where declining domestic demand is forcing
companies to export deflation to the rest of the world."
On the supply side, Russia's 2015 oil production is expected
to increase slightly from last year to 526 million tonnes, or
10.56 million barrels per day (bpd), deputy minister for natural
resources and ecology Denis Khramov said on Tuesday.
That would be up 1 million tonnes from last year but lower
than a forecast of 530.5 million tonnes by Russia's Economy
Ministry, and another sign that neither Russia nor the main
Middle East producers from the Organization of the Petroleum
Exporting Countries (OPEC) are so far willing to curb production
in support of prices. ID:nL5N11Y1KJ
The slumping oil and commodities markets are hitting shares
of trading merchants hard.
Stocks in mining and trading company Glencore GLEN.L fell
almost 30 percent and closed at a record low on Monday over
concerns it is not doing enough to cut its debt to withstand a
prolonged fall in commodity markets.
id:nH9N10T01F ID:nL5N11T43H
Shares of Asian commodity merchant Noble Group NOBG.SI
dropped as much as 15 percent on Tuesday, to their lowest level
since the global financial crisis in 2008. ID:nL3N11Z12Q
Offsetting some of the bearish sentiment was data from
market intelligence firm Genscape estimating a drawdown of over
1 million barrels last week from the Cushing, Oklahoma delivery
hub for U.S. crude, traders who saw the figures said.

(Editing by Joseph Radford)

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