By Henning Gloystein
SINGAPORE, Aug 14 (Reuters) - U.S. crude oil prices remained
close to their lowest in over six years early on Friday, as
rising U.S. stockpiles stoked oversupply and on worries over
demand from slowing economies in Asia.
U.S. oil prices tumbled more than 3 percent to a 6-1/2-year
low under $42 a barrel on Thursday as data showing a big rise in
key U.S. stockpiles intensified concerns over a growing global
glut.
Thursday's drops were driven by a report that stockpiles at
Cushing in Oklahoma, the delivery point for U.S. crude futures,
rose more than 1.3 million barrels in the week to August 11.
Markets remained weak in early trading on Friday. U.S. crude
CLc1 was trading at $42.08 per barrel at 0050 GMT, close to
over six-year lows. Brent futures LCOc1 were trading at $49.21
a barrel, down 1 cent from their last settlement but still some
way off from their 2015-low of $45.19.
On the demand side, China's slowing economy and weakening
currency could lead to a slump in consumption.
"WTI prices fell sharply to a six-year low amid rising
concerns around China's economic slowdown," ANZ bank said on
Friday, adding that further price falls were likely.
"The lowest crude prices in six years might not be enough to
put the brakes on the U.S. supply growth. U.S. shale players are
actively cutting cost and some players are profitable at less
than $30 per barrel."
Although China's crude oil demand has so far remained strong
as authorities take advantage of cheap oil to build up strategic
reserves and consumers kept spending despite the slowing
economy, there are signs of weakening, with the devaluation of
the yuan potentially denting fuel imports. ID:nL3N10L3B4
China's implied oil demand fell in July from the previous
month amid a continuing drop in the nation's vehicle.
Analysts at JPMorgan (NYSE:JPM) estimate around $235 billion of private
capital left China between the third quarter of 2014 and the end
of the second quarter this year.
China's slump may be spreading across Asia. Japan's economy
likely shrank in April-June as exports slumped and consumers cut
back on spending, a Reuters poll showed.
China's economic slowdown and its impact on its
trade-reliant Asian neighbours have also heightened the chance
that any rebound in growth in July-September will be modest,
analysts said.
(Editing by Joseph Radford)