Oil prices down as Greece default looms

SINGAPORE - Oil prices extended losses in Asia Tuesday on expectations Greece will miss a key debt repayment later in the day and edge closer to a eurozone exit, analysts said.

US benchmark West Texas Intermediate (WTI) for August delivery fell 23 cents to $58.10 while Brent crude for August eased 15 cents to $61.86 in late-morning trade.

WTI sank $1.30 and Brent lost down $1.25 Monday.

Crude tracked losses in global equity markets Monday after Greek Prime Minister Alexis Tsipras stunned the world at the weekend by breaking off bailout reform talks and calling for a referendum on austerity conditions demanded by its creditors.

The move means Athens is unlikely to agree a deal to unlock bailout funds to repay an IMF debt by the end of Tuesday, putting it in default and in danger of crashing out of the eurozone.

Top European leaders including Germany's Angela Merkel France's Francois Hollande and Italy's Matteo Renzi called on the Greek people to vote for the creditors' proposals, warning a "no" would mean exiting the eurozone.

"This display of volatility comes from the uncertainty with Greece," said Daniel Ang, investment analyst with Phillip Futures in Singapore.

Ang said with the US dollar holding firm due to investors viewing it as a safe haven, oil prices would remain pressured. A stronger greenback makes dollar-priced crude more expensive for buyers using weaker currencies.

Dealers were also waiting to see if Iran and major world powers can reach a deal on curbing Tehran's nuclear program by the end of Tuesday, a deadline set by both sides.

Such an agreement would allow Western powers to remove sanctions, paving the way for more Iranian crude to hit the already oversupplied international market.

US Secretary of State John Kerry warned Monday that "it was too early to make any judgements" on whether the deal will be agreed by the deadline.

source: www.abs-cbnnews.com

Oil jumps after Saudi king's death amid huge market shifts

SINGAPORE - Oil prices jumped in early Asian trading on Friday as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.

Abdullah died early on Friday and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.

U.S. benchmark WTI crude futures rose more than 2 percent to a high of $47.76 a barrel in early Asian trading. International benchmark Brent futures opened up almost 1.5 percent higher at $49.10 per barrel at 0100 GMT.

The Saudi King's death comes amid some of the biggest shifts in oil markets in decades.

"The fear of the unknown is going to be supportive to crude oil prices," said John Kilduff, partner, Again Capital LLC in New York.

"King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting," he added.

Oil prices have more than halved since peaking in June last year as soaring supplies clash with slowing demand.

Booming U.S. shale production has turned the United States from the world's biggest oil importer into the biggest producer, producing more than 9 million barrel per day.

To combat soaring output and falling prices, many oil exporters, such as Venezuela, wanted the 13-member Organization of the Petroleum Exporting Countries (OPEC) to cut output in order to support prices and revenues.

Yet, led by Saudi Arabia, OPEC announced last November it was keeping output steady at 30 million barrels per day.

Brent, which had already fallen to $77 per barrel by the time of the OPEC meeting, dropped another quarter over the next month as the market digested the fact OPEC would not come to the rescue.

OPEC's decision not to act, led by Saudi Arabia, was aimed at defending market share against U.S. shale producers as well as other non-OPEC exporters such as Brazil or Russia.

source: www.abs-cbnnews.com