Oil extends losses in Asian trade

AP PHOTO

SINGAPORE – Oil prices were lower in Asian trade Monday on the stronger US dollar and as investors await latest economic growth estimates from the United States, the world’s top oil consumer, analysts said.

New York’s main contract, West Texas Intermediate light sweet crude for delivery in August, was down nine cents at $93.60 a barrel in morning trade and Brent North Sea crude for August delivery shed 24 cents to $100.67.

“After last week’s losses, oil has eased off again in Asian trade mainly because of the strengthening US dollar,” Jason Hughes, head of sales trading at CMC Markets in Singapore, told AFP.

The greenback bought 98.24 yen in morning trade in Asia, compared with 97.87 yen in New York late Friday.

A stronger dollar tends to curb demand for dollar-priced crude oil from buyers using weaker currencies.

Investors’ trepidation over the US commerce department’s third estimate of US gross domestic product (GDP) in the first quarter of 2013 was also weighing on the crude market, according to Hughes.

The figures will be released on Wednesday. “There is some concern that if there is a revision of the estimates upwards, it might suggest that the US Fed will taper off its stimulus programme sooner,” said Hughes.

The oil market joined a global sell-off in stocks and gold last week in response to Fed chairman Ben Bernanke’s comments that the US central bank could begin to wind down its $85 billion-a-month bond purchases if the economy continues to improve.