SINGAPORE (Commodity Online) : World oil prices dropped further in Asian trade Monday mainly on concerns over lower demand after top producer Saudi Arabia announced plans to increase output.
Light sweet crude for July delivery was seen trading at $98.68 a barrel at 12.30 p.m Singapore time while Brent crude was seen at $118.45 a barrel in London.
Analysts said the black gold is likely to extend losses during the day as concerns over economic growths in world’s two largest economies China and the US.
Oil declined for a second day in New York before reports that may show slowing economic growth in the U.S. and China, curbing fuel demand in the world’s two largest crude consumers.
China’s oil processing volume in May rose 4.4 percent from a year earlier to 34.9 million tons, the National Development and Reform Commission said.
Country’s crude oil output rose 1.1 percent to 17.26 million tons. Oil product output increased 5.2 percent to 21.05 million tons and demand climbed 5.2 percent to 20.19 million tons.
Futures slid as much as 0.6 percent, extending the biggest single-session drop in four weeks on June 10. Oil is up 32 percent the past year.
The Brent contract traded at a record premium of $19.68 a barrel to US futures Monday. The difference between front-month contracts in London and New York averaged 76 cents last year.
Saudi Arabia announced plans to increase output w10 million barrels a day from next month.
On Saturday, Light, sweet crude for July delivery settled $2.64, or 2.6%, lower at $99.29 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange closed 79 cents, or 0.7%, lower at $118.78 a barrel.
