SINGAPORE (REUTERS) - Oil prices dipped again in early Asian trading on Tuesday (Aug 18) as traders expected lower refinery consumption after the US summer, while Asia's weakening economies and high global production raised concerns about oversupply.
US crude futures were trading at US$41.84 (S$58.90) per barrel at 0014 GMT (8.14am Singapore time), 3 cents below their last settlement and not far off more than six-year lows touched earlier this week. Brent futures were at US$48.61 a barrel, down 13 cents but still some way from their 2015 low of US$45.19.
Both crude oil benchmarks are now almost a third below their last peak from May, and analysts say more falls could lie ahead.
"Fundamentals suggest downside risks still remain in key markets - particularly iron ore and crude oil - in the months ahead," ANZ bank said on Tuesday.
"On the demand side, US refiners normally start to cut operations soon - with reduced refinery rates in September occurring in 9 of the past 10 years and weaker gasoline demand. The current situation suggests that we may witness increases in US crude stockpiles in coming months," the bank added.
In Asia, the two biggest economies are slowing down fast, with China recording its sharpest slowdown in decades and Japan's economy contracting.
Underscoring the bearish sentiment, money managers and hedge funds cut their net long holdings of Brent crude futures for a fourth straight week and have raised their bearish bets on gasoil as prices have fallen, exchange data showed on Monday.
Speculators reduced their net long Brent crude positions by 21,295 contracts to 125,889 lots in the week to Aug 11, figures from the Intercontinental Exchange showed.