Business News

SINGAPORE, (APP/AFP) – Oil prices fell in
Asia on profit-taking Friday following two days of gains, but analysts suggested there could be some extra gains after recently falling below $40 a barrel.
The losses come despite a rally across regional stock markets after
the Bank of England announced an interest rate cut — the first since 2009 — and surprise stimulus to shore up the economy following Britain’s vote to leave the EU.
At about 0720 GMT, US benchmark West Texas Intermediate was down 29
cents, or 0.69 percent, at $41.64 and Brent was 33 cents, or 0.75 percent, down at $43.96.
The commodity rose around six percent over Wednesday and Thursday
after an energy report showing US gasoline stockpiles had slipped last week.
However, the gains came after both contracts had fallen into a bear
market, having lost 20 percent from recent highs above the $50 seen in early June.
Prices dropped below $40 a barrel on Monday, the first time since
April.
“We’ve had a strong turnaround at a key level near $40 a barrel and
that means the risks for crude in the short-term appear to be to the upside,” Michael McCarthy, a chief strategist at CMC Markets in Sydney told Bloomberg News.
“It now looks like a potential return to a point between $44 and $45
is the most likely outcome.”
CMC Markets senior sales trader Alex Wijaya said told AFP that “other
than the $40 technical floor to oil, the dip in prices could also be due to
profit-taking from short-selling after Wednesday’s (stockpiles) data pushed
prices up”.
“Taking all this into consideration, the market is now trying to find
a fair value spot, a rebalance,” Wijaya said.
“Going forward, all eyes will be on demand in China and Asia.”
Investors will be watching the release later Friday of US July jobs
data, which will give a fresh look a the world’s top economy and oil consumer.