Comments
Crude oil prices were mixed in Asian trade today on easing supply concerns as a landmark deal to curb oil-rich Iran’s disputed nuclear programme came into force.
The US benchmark contract, West Texas Intermediate for delivery in February, was down 32 cents at $94.05 a barrel in the afternoon, while Brent crude for March reversed earlier losses to climb 19 cents to $106.54.
Nuclear deal
Iran had yesterday halted the production of 20 per cent enriched uranium, as an interim deal between Tehran and world powers first reached in November came into force.
Under the agreement, Iran agreed to curb parts of its nuclear drive for six months in exchange for receiving modest relief from international sanctions and a promise by the so-called P5+1 — Britain, China, France, Russia, the United States plus Germany — not to impose new sanctions against its hard-hit economy.
The deal helps reduce geopolitical risks in the oil-producing West Asian region, reducing threats of supply disruptions and putting downward pressure on prices.
China’s GDP growth
Flat Chinese economic growth is also weighing on the market because of its impact on oil demand. China’s GDP registered a flat growth of 7.7 per cent last year, maintaining its slowest expansion in more than a decade.
Kelly Teoh, market strategist at IG Markets in Singapore, said investors were closely watching the growth in the world’s second biggest economy.
“Everyone is trying to get a gauge about what’s going to happen,” Teoh said.
“Crude oil sustained some headwinds from China’s economic releases, which highlighted potential underlying risks in the world’s second-largest economy,” Phillip Futures added in a market commentary.
“Negative sentiments on the Chinese market may dampen the demand for crude oil, given that China is the world’s second-largest consumer for crude oil after the US,” it said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.