AFP, Singapore :
World oil prices extended losses in Asia Tuesday on weak economic data from top consumer China and a realisation that a hoped-for deal among producers to cut output would not happen.
Prices were boosted late last month by speculation that Russia and members of the Organization of the Petroleum Exporting Countries would reach agreement to slash output in the oversupplied market.
But the upward momentum hit a snag after traders became increasingly sceptical about such a deal. News that manufacturing activity in China contracted at its fastest pace in more than three years in January dealt a further blow to sentiment.
Prices fell further in the afternoon, and by 0630 GMT, US benchmark West Texas Intermediate for delivery in March was down 63 cents, or 1.99 percent, at $30.99. Brent crude for April dipped 64 cents, or 1.87 percent, to $33.60.
The rise in oil prices last month “was based on shaky foundations, namely hopes that Russia and OPEC would agree to cut output”, Capital Economics said in a market commentary.
“We doubt that there will be any coordinated agreement even though the market remains oversupplied. Meanwhile, US inventories of both crude oil and gasoline have continued to build over the last month. Indeed, US crude oil stocks are now at record highs.”
Oil has lost around 70 percent of its value since June 2014 as supplies piled up and demand was hit by a global economic slowdown led by China, the world’s second biggest economy.
