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View all search resultsOil prices rise in Asia but China, Greece cap gains
Oil prices rose in Asia Thursday but remain subdued by concerns about the impact on demand from the stock market rout in China and Greece's debt crisis, analysts said
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O
il prices rose in Asia Thursday but remain subdued by concerns about the impact on demand from the stock market rout in China and Greece's debt crisis, analysts said.
Robust commercial crude inventories in the United States added to the pressure in the face of a supply glut, they said.
US benchmark West Texas Intermediate for August delivery was up 87 cents at $52.52 and Brent crude for August rose 81 cents to $57.86 a barrel in afternoon trade following recent sharp losses.
"Rising uncertainties from the Greek debt bailout and China's stock market turmoil put global demand at risk," said Sanjeev Gupta, who heads the Asia-Pacific Oil and Gas practice at professional services organisation EY.
"Commodity prices fell sharply this week with crude prices suffering their largest sell-off in five months, slumping more than 8.0 percent."
Chinese stocks have taken a severe beating after government measures failed to staunch the bloodletting that has wiped out around a third of China's main share market in under a month.
China's benchmark Shanghai stock index surged more than five percent in afternoon trading on Thursday, extending gains after the government issued more policies to halt a market slide, but analysts said it was unclear whether the rally would be sustained.
"A stock market bust can... leave a lot of people out of pocket and that could dampen domestic spending, which has already been waning," said Jasper Lawler, market analyst at CMC Markets.
"Also, smaller market capitalisations will mean Chinese businesses cannot borrow as much for expansion, limiting employment opportunities and further curtailing spending," he said in a market commentary.
In Europe, Greece's future in the eurozone is at risk after European leaders gave the debt-stricken nation a final deadline of Sunday to reach a bailout reform deal.
Traders were also keeping a close eye on intense negotiations in Vienna between the West and Iran on curbing Tehran's nuclear ambitions, said Gupta, the EY analyst.
An agreement with Iran would see the West lift punishing economic sanctions that have restricted the country's oil exports.
"An outflow of Iranian oil could put downside pressure on crude prices in a global market that is already oversaturated by a glut of oversupply," Gupta said. (ika)(++++)
