Oil prices edged lower in Asia

12:30 PM | 4 Sep, 2015
Oil prices edged lower in Asia
SINGAPORE (APP) - Oil prices edged lower in cautious Asian trade Friday as investors await the release of a US jobs report for August that could determine the Federal Reserve’s timetable for hiking interest rates.

US benchmark West Texas Intermediate for October delivery fell 17 cents to $46.58 while Brent crude for October eased 16 cents to $50.52 in late-morning trade.

“With the Federal Reserve closely eyeing employment figures in order to gauge the strength of the economy, US non-farm payrolls should be crucial,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.

“If non-farm payrolls turn out lower than expected, this could suggest a December 2015 rate hike instead,” Ang said.

A rate hike would likely strengthen the greenback, making dollar-priced oil more expensive to holders of weaker currencies, hurting demand and prices.

However, Ang said crude retained some support after the European Central Bank (ECB) on Thursday indicated more stimulus could be on its way for the eurozone.

ECB president Mario Draghi said the bank was ready to ramp up its vast bond-buying scheme — known as quantitative easing (QE) — if needed to kick-start the stuttering eurozone economy.

The bank also cut its growth and inflation forecasts for 2015-2017, noting the downside risks from low oil prices and the economic slowdown in China.

Ang said Draghi’s comments “caught the attention of the markets more, allowing markets to remain bullish”.

Prices have fluctuated wildly in recent weeks on uncertainty about Fed monetary policy as well as worries about the economy of number-one energy consumer China.

Tuesday saw them turn sharply lower after weak manufacturing data from China and the United States clouded the outlook. They had surged more than 25 percent over the three days before that.