Oil Prices Halt Rise in Asian Trade

W460

Oil prices halted their rise in Asia Monday, hurt by the strengthening U.S. currency which makes the dollar-price commodity more expensive.

The greenback rose after Japan's central bank shocked markets Friday with a decision to adopt a below-zero interest rate policy in a bid to spur bank lending and drive up inflation.

Bank of Japan chief Haruhiko Kuroda cited recent financial market turmoil and a China slowdown for ushering in a -0.1 percent rate on new reserves, and said the bank may go even further into negative territory.

By 0620 GMT, U.S. benchmark West Texas Intermediate for delivery in March was down 51 cents, or 1.52 percent, to $33.11.

Brent crude for April, a new contract, was trading 59 cents, or 1.64 percent, lower at $35.40 a barrel.

The March contract ended on Friday under a revised scheme in which Brent now expires at the end of each month instead of every 15th.

"Oil has stopped its bullish momentum and most of the reason comes from the relatively strong dollar on light of Japan's surprising negative interest rate decision," said Phillip Futures analyst Daniel Ang.

As oil is traded in dollars, a rise in the greenback will make crude more expensive for holders of weaker units, dampening demand and hurting prices.

Oil prices closed higher last week to end a turbulent January in which prices plunged to 12-year lows in the face of a global oversupply.

Speculation that Russia and the Organization of the Petroleum Exporting Countries will meet to discuss oil output cuts to push up prices supported sentiment last week.

The news, however, drew skepticism that such a meeting or agreement would take place, limiting its impact.

Ang said crude supply glut is likely to continue limiting any oil price gains.

"I don't think oil prices will continue rising without changes in fundamentals," he told Agence France Presse.

Comments 1
Thumb chrisrushlau 01 February 2016, 17:01

The market is betting that the king, so called, of Saudi Arabia will find solace and comfort in his partnership with the Jewish state in Palestine and stop trying to keep the price of oil down, which he has been doing in an attempt to bribe Western consumers into ignoring the resemblence of his regime to ISIS. Follow Israel's way by defying public opinion: but will it work? Will it only increase pressure on Israel?