Oil prices fall again, dealers cautious before Us Fed meeting By AFP

Oil prices resumed their retreat in Asia Tuesday
after enjoying rare gains overnight, as investors
train their sights on the US Federal Reserve’s
most hotly anticipated policy meeting in years.
After plunging around 12 percent last week crude
closed slightly up Monday. But with global
demand still weak and a continuing supply glut,
the commodity was unable to build up any price
momentum in Asia.
Energy firms, which have been hammered for
months by the sinking oil price — down more
than 60 percent since June 2014 — enjoyed early
gains but late selling saw most end the day
further in the red.
The decision by the OPEC oil exporters’ group
earlier this month not to cap production levels
continues to depress prices. BMI research said in
a report that more downside pressure is expected
in the coming months.
“Oil prices will remain anchored by oversupply,”
it said, predicting that the global surplus “will
only narrow significantly post-2018”.
Woodside Petroleum in Sydney edged down 0.8
percent and Santos shed 1.8 percent, while Inpex
in Tokyo was more than one percent off.
However, broad gains in Hong Kong — after
eight straight losses — helped CNOOC and
PetroChina rise more than one percent in the
afternoon.
Dealers are turning their attention to
Washington, where the Fed later Tuesday begins
its two-day policy meeting expected to end with
its first interest rate rise for nine years.
While analysts say the increase has been on the
cards for several weeks, the real focus is on
subsequent steps.
– Dollar struggles –
“Investors are focusing on the Fed,” Toshihiko
Matsuno, chief strategist at SMBC Friend
Securities, told Bloomberg News.
“They want to see what the Fed will announce on
the target interest rate at the end of 2016. There’s
market consensus that rates will rise this week,
but it is unclear what happens after that.”
The dollar has been subdued in recent sessions,
with the euro edging up despite the expected US
rate rise and speculation the European Central
Bank will go the other way and loosen monetary
policy to kickstart the eurozone economy.
“If anything, the trend for the dollar going into
the Fed is a little bit on the soft side, as generally
speaking it’s all about justifying the current
positioning rather than pushing it further,” said
Sam Tuck, a senior currency strategist at ANZ
Bank New Zealand.
The euro edged up above $1.10 and the
greenback fell to 120.80 yen — well off the levels
above 123 yen seen last week.
Asian stock markets remained largely shaky
despite a positive lead from Wall Street, where all
three main indexes ended in positive territory
Monday.
Tokyo was the main loser as the stronger yen hit
exporters. The Nikkei tumbled 1.7 percent, while
Sydney fell 0.4 percent, and Shanghai edged 0.3
percent lower. There were also losses in Manila,
Jakarta and Kuala Lumpur.
However, Hong Kong was up 0.4 percent in the
afternoon after falling for the previous eight
days, Seoul closed up 0.3 percent and Singapore
advanced 0.1 percent.
– Key figures around 0710 GMT –
Tokyo – Nikkei 225: DOWN 1.7 percent at
18,565.90 (close)
Hong Kong – Hang Seng: UP 0.4 percent at
21,386.14
Shanghai – composite: DOWN 0.3 percent at
3,510.35 (close)
Euro/dollar: UP to $1.1034 from $1.0992 late
Monday
Dollar/yen: DOWN to 120.80 yen from 120.98 yen
New York – Dow: UP 0.6 percent at 17,368.50
(close)
London – FTSE 100: DOWN 1.3 percent at
5,874.06 (close)