Oil dips in early trade: Investors take advantage of last week’s rally and take profits:
Oil prices fell in Asia on Monday as traders took profits, snapping three days of gains last week that saw the biggest two-day rally in six years.”There is definitely a lot of profit taking going on,” said Daniel Ang, an analyst at Singapore’s Phillip Futures.
“There is some readjustment in the positions taken by traders,” he said.
That came after Brent climbed 10% last week, while US crude finished the week up 12%.
Brent crude futures for October delivery fell 86 cents, or 1.7%, to $49.19 per barrel on Monday after ending up $2.49, or 5%, in the previous session. The contract slipped as low as $49.10 in early trade.
US crude for October delivery fell 70 cents to $44.52 per barrel after settling up $2.66, or 6.3%, in the previous session. It fell as low as $44.40 in early trade.
Mixed signals by US financial policymakers last week on whether the US Federal Reserve would raise interest rates next month was weighing on sentiment, Ang said.
Some Fed policymakers left the door open to a September interest rate hike at an annual central bankers meeting on Friday in comments that appeared to contradict those by the New York Fed president earlier in the week who said a rate increase seemed “less compelling”.
The comment came after turmoil in global markets in recent weeks following China’s currency devaluation and concerns over its slowing economy.
Investors are eyeing a slew of economic data, including key US non-farm payroll data, later this week that could give direction on a possible US rate hike when Fed policy makers meet on 16-17 September.
A rate hike is expected to support the US dollar, making commodities including oil more expensive for users of other currencies.
The market is also watching the outcome of planned United Nations-brokered talks later this week between Libya’s warring factions aimed at forming a unity government.
Libya posted a budget deficit of 4.5 billion dinars ($3.3 billion) in the first seven months of 2015 as oil production fell and weak oil prices weighed, the Tripoli-based central bank said on Sunday.
