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Oil falls on oversupply, economic data concerns

SINGAPORE, June 23, 2015

Oil prices fell in Asian trade on Tuesday on renewed worries over a global glut of oil and lacklustre demand ahead of preliminary manufacturing figures from China and Japan later on Tuesday.

But a forecast drawdown in US crude stocks put a floor under prices.

Brent crude for August delivery was down 16 cents at $63.18 a barrel as of 0110 GMT, after closing the previous session up 32 cents.

US crude for August delivery fell 18 cents to $60.20 a barrel. The July contract, which expired on Monday, closed up 7 cents at $59.68 a barrel.

"I think the Japan and China PMI figures are weighing on the market," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.

China and Japan are Asia's two biggest oil importers.

Japan's PMI June figures are due for release at 0135 GMT followed by the HSBC Flash China Manufacturing PMI at 0145 GMT. Euro zone PMI figures will follow later on Tuesday.

"Although lately data has been weak, growth in these regions should support crude prices," Phillip Futures said in a research note.

A figure below 50 in the purchase manufacturers index would show contraction in manufacturing activity, while a figure above 50 would show an expansion of activity.

Growth in US gasoline stocks, which increased by almost 500,000 barrels in the week to June 12, high US crude output of about 9.6 million barrels per day and 2 million barrels per day of excess capacity by oil producers cartel Opec added to oversupply concerns, Barratt said.

US commercial crude oil stocks likely fell last week by an average of 1.8 million barrels to around 466 million barrels, according to a Reuters analysts poll on Monday taken ahead of weekly industry and US Department of Energy inventory reports.

Analysts at ANZ have forecast a 1.5 million barrel decline in US crude inventories, a move which may give some support for oil prices this week.

Industry group, the American Petroleum Institute (API) will release its data on Tuesday at 2030 GMT, while the US Department of Energy's Energy Information Administration (EIA) will publish its data on Wednesday at 1430 GMT. – Reuters




Tags: Brent | oil price | US crude | oversupply | economic data |

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