Aug 20, 2011

Oil Prices Extend Losses in Asian Trade


Oil prices extended losses in Asian trade Friday as the latest economic data shook eroding confidence in the US economy, with the eurozone debt crisis adding to the gloom.

Crude prices tumbled along with Asian equities on fears that energy demand will crumble if the world is engulfed by another recession.
New York's main contract, West Texas Intermediate light sweet crude for September delivery, dived $1.42 to $80.96 a barrel in afternoon Asian trade, while Brent North Sea crude for October dipped 79 cents to $106.20.

Phillip Futures said in a market commentary that the disappointing US economic data -- including regional manufacturing, jobless claims and inflation -- "provided a fresh blow to shaky investor confidence".
Fears of another global meltdown were heightened after Morgan Stanley said in a report that the United States and Europe were dangerously close to recession, and that growth in the big emerging economies would be slower than it earlier forecast.
Oil prices were also being dampened by a stronger dollar, seen as a safe-haven currency in times of crisis.
A stronger greenback makes dollar-priced oil more expensive for holders of other currencies, curbing demand and helping to push prices lower.
In Asian trade Friday, the euro faced further pressure as tumbling stocks continued to erode risk appetite.

Source : AFP

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