SINGAPORE: Oil prices edged lower in Asia on Friday following lacklustre US economic data that has fuelled bearish sentiment about demand in the world’s top crude consumer.
US benchmark West Texas Intermediate for August delivery was down 23 cents to $105.61, while Brent crude eased 16 cents to $113.05 in afternoon trade.
The US Commerce Department said on Thursday that consumer spending rose a mere 0.2 percent in May after flattening in April, raising questions about economic recovery in the world’s biggest economy.
“This has cast doubt on the growth outlook for the second quarter of this year, particularly after a wider-than-expected contraction in the first quarter,” Desmond Chua, market analyst at CMC Markets in Singapore, said, referring to weak GDP figures released Wednesday.
The report comes after the Energy Information Administration on Wednesday reported an unexpected build in US crude inventories last week.
A rise in US stockpiles is typically indicative of weakening demand in the energy-guzzling nation, which would in turn put pressure on prices.
Markets remained focused on the 1.7 million barrel surge in the week ending June 20 “in the absence of new drivers in the market,” Singapore’s United Overseas Bank said.
Traders are continuing to keep a close watch on crude producer Iraq, where sectarian violence has continued unabated for nearly three weeks.
Jihadist insurgents have captured swathes of Iraqi territory in a lightning offensive that began on June 9, but they have yet to directly threaten the key oil-producing region in the south.