Oil prices ease off in Asia after hitting new highs

AP FILE PHOTO

SINGAPORE, Singapore—Oil prices eased slightly in Asia Friday after hitting a series of new highs this week, bolstered by a weak dollar.

The US Federal Reserve held interest rates unchanged after its policy meeting on Wednesday, signalling it was in no hurry to raise rates.

On Thursday, the dollar fell about 3.0 percent against the Japanese yen after the Bank of Japan disappointed markets by not offering additional stimulus measures for the struggling economy.

At about 0315 GMT, US benchmark West Texas Intermediate for June delivery was seven cents down at $45.96 while Brent North Sea for June delivery was eight cents lower at $48.06.

On Thursday, Brent rose to $48.14 a barrel, its highest price since November, while WTI traded at $46.03 a barrel, its loftiest mark this year.

The slight clawback during early Asian trading hours on Friday could be put to profit taking and normal market fluctuations, said Alex Wijaya, a senior sales trader with CMC Markets in Singapore.

“It used to be that any move from Saudi Arabia could control the market but increasingly, this is less so and we’re seeing moves from America, China and even Iran affecting the market,” he told AFP.

With prices edging closer to $50, it is possible that US shale producers might resume drilling again, bringing up production, he said.

“From what I understand, the breakeven point for shale is between $50 to $60, so those drilling now are operating at a loss.

“When prices go up and they resume, we’ll have to see whether demand can catch up with supply,” Wijaya said.

RELATED STORIES

Oil prices hit fresh 2016 highs, pass $47

Oil prices jump on report Saudi plans to reduce drilling