HONG KONG: Energy firms sank in Asian trade on Tuesday as oil prices extended the previous day’s sharp losses on profit-taking and fresh worries about a global oversupply.
Even a fall in the dollar, which usually makes crude cheaper, was unable to stop the slide in the commodity after Iraq flagged a pick-up in output and rebels in key producer Nigeria announced a ceasefire.
Investors were also treading water as they awaited a key speech from Federal Reserve boss Janet Yellen hoping for some insight into the state of the US economy and the bank’s plans for its next interest rate hike.
After a seven-day rally that put oil into a bull market — a 20 percent jump from recent lows — the commodity has taken a hiding since the start of this week.
In morning trade on Tuesday, West Texas Intermediate fell 1.5 percent to $46.70 and Brent lost 1.3 percent to $48.54.
On Monday, WTI shed 2.9 percent and Brent 3.4 percent after Iraq signaled a likely increase in output from Kirkuk’s oil fields under a deal between the region and the country’s new oil minister.
And on Saturday the Niger Delta Avengers announced a conditional ceasefire and agreed to hold talks with the government following months of attacks on key oil and gas facilities.
The two developments follow a surge that helped Brent last week break above $50 for the first time since early July and analysts warned of further drops.
