Oil prices down in Asian trade

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SINGAPORE: Crude prices edged lower in Asia on Tuesday on worries about a global oversupply after a veteran former energy minister in Qatar warned OPEC members against cutting output unilaterally.

US benchmark West Texas Intermediate for June delivery fell eight cents to $59.17 while Brent crude for June eased 16 cents to $64.75 in late-morning trade.

Abdullah al-Attiyah, who led the energy portfolio in oil-rich Qatar for about two decades, said Monday OPEC should first reach a binding agreement with non-members before reducing production.

“OPEC should not do anything because it is not the swing producer” of the past, Attiyah told reporters in Kuwait City.


“They cannot and will not cut (output) unless the main producers outside OPEC join forces,” he said.

The 12-nation Organisation of the Petroleum Exporting Countries in November maintained output levels despite tumbling prices.

The group, led by de-facto kingpin Saudi Arabia, pumps about 30 percent of global crude.

Nicholas Teo, market analyst at CMC Markets in Singapore, said concerns over a persistent global oversupply “continue to put a cap on oil prices”.

Those worries were compounded by latest US data showing petroleum drilling is picking up in some areas.

The closely watched Baker Hughes US oil rig count fell by just 11 to 668 last week.

Dealers have been hoping that a slowdown in US shale output could help ease the build up of global crude reserves, which was a key reason for the collapse in prices of more than 50 percent between June and January.

Overall crude reserves in the US likely fell by 500,000 barrels in the week to May 8, according to a survey of analysts by Bloomberg News.

The US Energy Department will release the official stockpiles figures on Wednesday.

AFP

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