By Henning Gloystein
SINGAPORE (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 were at $47.37 per barrel at 0443 GMT, down three cents since their last settlement but following a more than 2.5-percent drop on Monday. U.S. West Texas Intermediate (WTI) futures were unchanged at $44.43 a barrel.
Traders said crude prices had received some short-term support from a weaker dollar, which makes dollar-traded oil imports cheaper for countries using other currencies.
Further offsetting some of the bearish sentiment was data estimating a drawdown of over 1 million barrels last week from the Cushing, Oklahoma delivery hub for U.S. crude.
Yet the overall outlook remained gloomy. Oil prices, along with most other commodities, have fallen sharply recently, with crude futures losing almost 60 percent of their value since June 2014.
Asian shares skidded to 3-1/2-year lows and the dollar sagged on Tuesday, pulled down by sharp losses on Wall Street after weak Chinese data rekindled worries about its fragile economy.
“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.
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.
Middle East OPEC producers Kuwait and the United Arab Emirates have both indicated this week that they continued to stick to their policy of defending market share by keeping production high over supporting oil prices via output reductions.
The slumping oil and commodities markets are hitting shares of trading merchants hard.
Stocks in commodity merchant Glencore fell almost 30 percent and closed at a record low on Monday, and shares of Asian commodity merchant Noble Group dropped as much as 15 percent on Tuesday, to their lowest level since 2008.
(Editing by Joseph Radford and Anand Basu)
Image source: Statoil (illustration only)