Oil prices extended their losses in Asia today after Japan’s economy slumped to recession, while prospects for an OPEC output cut have dimmed, analysts said.
US benchmark West Texas Intermediate crude for December delivery fell 32 cents to $75.32, while Brent crude for January delivery was down 43 cents at $78.88 in late-morning trade.
Prices are facing pressure from “weak Japanese economic data and increasing scepticism that OPEC will be able to agree to rein in oil production”, Singapore’s United Overseas Bank said in a note to investors.
Official Japanese data had yesterday showed that the world’s number three economy shrank 0.4 per cent in the July-September quarter, or an annualised rate of 1.6 per cent.
That followed a revised 1.9 per cent shrinkage in April-June, putting the economy into technical recession.
Japan’s oil imports
Japan was the world’s third-largest net importer of crude oil in 2013 after the United States and China, according to data from the US Energy Information Administration.
The country imported about 4.4 million barrels a day in 2013, one third of which was from Saudi Arabia.
OPEC meet in Vienna
Dealers are monitoring developments at the Organization of Petroleum Exporting Countries ahead of the cartel’s November 27 meeting in Vienna.
Despite a drop of more than 25 per cent in prices since June, OPEC has been divided on whether to reduce the output and prevent further falls.
Venezuela and Ecuador have called publicly for a cut, but key member Saudi Arabia has so far resisted.
OPEC pumps about a third of global crude and is currently producing just under 31 million barrels per day, around one million more than its ceiling.