SINGAPORE: Oil prices edged higher in Asia on Tuesday on a weaker dollar but gains were capped by concerns about tepid Chinese demand and OPEC’s decision to maintain its current output levels, analysts said.
US benchmark West Texas Intermediate for July delivery rose 24 cents to $58.38 while Brent crude for July gained 23 cents to $62.92 in late-morning trade.
The US dollar edged down to 124.44 yen in Asian trade from 124.47 yen in New York well off the 125.56 yen seen on Friday.
A weaker greenback makes dollar-priced oil cheaper for buyers using weaker currencies, boosting demand and pushing global prices higher.
However, Singapore’s United Overseas Bank said prices were weighed by “a slump in Chinese demand and worries that OPEC’s decision to pump without restraint could prolong the current supply glut”.
China released data Tuesday showing inflation eased in May, missing expectations and reigniting worries the country could tip into a deflationary spiral.
The figures came a day after officials said imports plunged last month while exports also fell, the latest indicators pointing to a continued slowdown in the world’s top energy consumer.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said dealers will next scrutinise more Chinese data to be released this week. Data on annual retail sales and industrial production will be released on Thursday.
Investors are digesting the impact on prices after the 12-nation Organisation of the Petroleum Exporting Countries (OPEC) on Friday defied calls to cut output despite the big drop in crude prices since last year, analysts said.
Instead, they kept their collective target at 30 million barrels per day — where it has stood for more than three and a half years.
