0304 GMT: Crude oil futures edged lower during mid-morning trade in Asia Sept. 29 amid persistently weak demand and supply fundamentals, surrendering some of the gains made overnight on the back of a surge in US equity prices and a weaker dollar.
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At 11:04 am Singapore time (0304 GMT), ICE Brent November crude futures were down 20 cents cents/b (0.47%) from the Sept. 28 settle at $42.23/b, while the NYMEX November light sweet crude contract was 24 cents/b (0.59%) lower at $40.36/b.
The retreat came after a surge in US equity prices and a weakened dollar saw the markers settle 51 cents/b and 35 cents/b higher, respectively, on Sept. 28.
Bearish factors on both the demand and supply sides continued to weigh in Asia trade Sept. 29, and were not expected to improve in the near term, market sources said.
“Rising COVID-19 cases is seen as potential threat for the ongoing demand recovery, while Libya supply is returning at an inopportune time. Libya’s production has increased, almost tripled, from 90,000 b/d to 250,000 b/d,” ANZ analysts said in a note Sept. 29.
However the continuing recovery in China’s industrial sector was providing a glimmer of relief, market sources said.
“Earnings in China’s colossal production and operations engines provided further evidence of a robust economic comeback,” AXIcorp Chief Global Markets Strategist Stephen Innes said in a Sept. 29 note.
For now, market hopes are pinned on the passing of a US stimulus package that could reinvigorate the stagnating US economic recovery.
“The US stimulus checks will go a long way to shoring up the US oil demand at a most critical juncture,” Innes added