SINGAPORE: Oil prices rose in Asia on Monday, but analysts said gains were capped following weakened demand caused by refinery shutdowns and easing concerns about armed conflicts around the world.
US benchmark West Texas Intermediate for September delivery was up 10 cents to $97.98 while Brent for September gained 23 cents to $105.07 in afternoon trade.
Singapore’s United Overseas Bank said oil prices were pressured by multiple factors “including logistical issues in pipeline and refinery systems that weakened demand and that there is ample global supply despite the troubles in Iraq, Libya and Eastern Europe.”
Reports of refinery outages in the United States last week have caused concern that crude inventories will build at the Cushing, Oklahoma oil-trading hub, with the supply glut dampening prices.
Oil prices have seen a build in risk premium in recent months over armed insurgencies in crude producers Iraq and Libya, as well as Ukraine, a key conduit for Russian energy exports to Europe.
But a market awash with supplies have since eased worries that disruptions caused by these geopolitical crises will have any significant impact on prices.
Desmond Chua, market analyst at CMC Markets in Singapore, said investors are also digesting a lacklustre US jobs report released Friday.
The Commerce Department reported that the US economy, the world’s biggest, generated 209,000 new jobs in July down from June but maintaining a solid 200,000 -plus monthly streak since February.
The unemployment rate rose 0.1 percentage point to 6.2 percent.
“Despite the disappointing payrolls figures, it was also the sixth consecutive month of the economy adding more than 200,000 jobs to the economy,” Chua said.
“This is widely considered to be healthy labor growth by economists,” he added. AFP