Oil declined as expanding U.S. crude inventories kept supplies at the highest level in more than eight decades.
Futures lost as much as 1 percent, erasing a 0.9 percent gain Wednesday. Stockpiles increased for a second week to 507.6 million barrels, the most since 1930, according to an Energy Information Administration report. Prices won’t recover until the second half of next year at the earliest, Mexican Energy Minister Pedro Joaquin Coldwell said at a conference in Houston, estimating that the market is oversupplied by about 2 million barrels a day.
West Texas Intermediate for April delivery fell as much as 32 cents to $ 31.83 a barrel on the New York Mercantile Exchange and was at $ 31.86 at 3:05 p.m. Hong Kong time. The contract rose 28 cents to $ 32.15 Wednesday. Total volume traded was about 26 percent above the 100-day average. Prices lost 30 percent last year.
Brent for April settlement lost as much as 39 cents, or 1.1 percent, to $ 34.02 a barrel on the London-based ICE Futures Europe exchange. The contract advanced $ 1.14, or 3.4 percent, to $ 34.41 on Wednesday. The European benchmark crude was at a premium of $ 2.24 to WTI.
Asian stocks fell on low trading volume as energy shares dropped with oil and a stronger yen weighed on Japanese equities.
The MSCI Asia Pacific Index slipped 0.9 percent to 119.23 as of 5:01 p.m. in Tokyo, extending its 2016 retreat to 9.7 percent. Material and energy companies led losses on the benchmark gauge on Wednesday, with Australia’s S&P/ASX 200 Index falling 2.1 percent. U.S. crude slid 2.6 percent, extending a 4.6 percent loss last session, after Saudi Arabia said a recent agreement to freeze output won’t lead to production cuts, while Iran called the deal “ridiculous.”
Worries this year have centered on the slowdown in China’s economy, tumbling oil prices and the pace of U.S. interest-rate increases. Private gauges of Chinese manufacturing and services fell to new lows in February and a reading of business confidence slipped, signaling the nation’s growth slowdown hasn’t bottomed out yet.
Hong Kong’s Hang Seng Index retreated 1.2 percent, with volume about 30 percent below average. The Hang Seng China Enterprises Index lost 1.3 percent and Taiwan’s Taiex Index slid 0.6 percent. The Shanghai Composite Index added 0.9 percent, trimming this year’s decline to 17 percent. The yuan weakened for a fourth day before the start of Group of 20 meetings in Shanghai on Friday.
Source : Bloomberg