Oil prices drift lower in Asian trade

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SINGAPORE: Oil prices were mixed in rangebound Asian trading Friday as dealers looked for fresh direction after the US central bank signalled it would keep its record-low benchmark interest rates on hold.

US benchmark West Texas Intermediate (WTI) for July delivery fell 14 cents to $60.31 while Brent crude for August gained five cents to $64.31 in afternoon trade.

“Prices continue on its sideways trend without much change to fundamentals,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.

“Prices are showing heavy reluctance to deviate from $60 for WTI and $64 for Brent and this should continue into next week,” Ang said.


Oil prices rose modestly Thursday as dealers reacted to the US Federal Reserve’s decision the previous day to leave its key interest rate unchanged.

The world’s most powerful central bank said it would adopt a cautious and methodical approach to raising them later in the year.

Interest rate adjustments are closely watched by crude investors as an increase usually leads to a pick-up in the greenback, which makes dollar-priced oil more expensive for buyers using weaker currencies and so dents demand.

Elsewhere, investors remain concerned that top producer and leader of the OPEC cartel Saudi Arabia could boost output in an already over-supplied market, analysts said.

The kingdom’s oil minister, Ali al-Naimi, said Thursday it is ready to pump more if demand rises, Bloomberg News reported.

It has 1.5 million to two million barrels a day of spare production capacity, al-Naimi said before a meeting with Russian Energy Minister Alexander Novak on Thursday.

Investors have previously voiced concern over the OPEC cartel’s strategy of maintaining high production levels to squeeze US shale producers out of the market.

AFP

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