Oil down nearly 3% on Wall Street, China(Update)

SINGAPORE: Oil prices remained low in early Asian trading on Tuesday following a slide of almost 3 percent the previous session, dragged down as concerns over Asia's economic health mounted and as production remained high.

Brent crude futures were at $47.31 per barrel at 0138 GMT, down 3 cents from their last close and following a more than 2.5-percent drop on Monday. U.S. West Texas Intermediate (WTI) futures were at $44.44 a barrel, virtually unchanged from their last settlement.

Oil prices, along with most other commodities, have fallen sharply recently, with crude futures losing almost 60 percent of their value since June 2014.

Japanese stock markets, among the earliest to open in Asia, slid to eight-month lows on Tuesday as global stocks came under pressure from worries about economies in China and other emerging markets.

"China's industrial profits declined 8.8 percent in August from a year earlier, with the biggest drops concentrated in producers of coal, oil and metals," ANZ said on Tuesday.

"These declining margins are likely to add to the global deflationary story, where declining domestic demand is forcing companies to export deflation to the rest of the world."

On the supply side, Russia's 2015 oil production is expected to increase slightly from last year to 526 million tonnes, or 10.56 million barrels per day (bpd), deputy minister for natural resources and ecology Denis Khramov said on Tuesday.

That would be up 1 million tonnes from last year but lower than a forecast of 530.5 million tonnes by Russia's Economy Ministry, and another sign that neither Russia nor the main Middle East producers from the Organization of the Petroleum Exporting Countries (OPEC) are so far willing to curb production in support of prices.

The slumping oil and commodities markets are hitting shares of trading merchants hard.

Stocks in mining and trading company Glencore fell almost 30 percent and closed at a record low on Monday over concerns it is not doing enough to cut its debt to withstand a prolonged fall in commodity markets.

Shares of Asian commodity merchant Noble Group dropped as much as 15 percent on Tuesday, to their lowest level since the global financial crisis in 2008.

Offsetting some of the bearish sentiment was data from market intelligence firm Genscape estimating a drawdown of over 1 million barrels last week from the Cushing, Oklahoma delivery hub for U.S. crude, traders who saw the figures said.- Reuters

Earlier Report:

NEW YORK: Oil prices fell nearly 3 percent on Monday, pressured by tumbling equities on Wall Street and weak Chinese economic data, although an estimated drawdown in crude stocks at the key U.S. storage hub appeared to limit losses, traders said.

Gyrations in U.S. equity prices <.DJI> and the dollar <.DXY> from bets on the timing of the first U.S. rate hike in nearly a decade have fed volatility in oil prices, which have swung up to 8 percent a day over the past month.

Wall Street's S&P 500 index <.SPX> was down 2.2 percent after hitting a one-month low on bullish U.S. consumer spending data in August and bets of a rate hike by October. [.N]

"Oil is on the back foot as risk aversion is on the rise once more," said Matt Smith, director of commodity research at ClipperData, an energy markets database and consultancy in New York. "There is a distinct air of doom and gloom around."

Brent , the key indicator for global crude prices, settled down $1.26, or 2.6 percent, at $47.34 a barrel.

The U.S. crude benchmark , West Texas Intermediate (WTI) settled down $1.27, or 2.8 percent, at $44.43.

Heavy oil oversupply and eroding demand for energy in No. 2 economy China and other Asian and emerging markets have halved crude prices over the last year.

In China, also the world's largest commodities consumer, industrial companies' profits fell at their fastest rate in four years, sparking fresh worries about manufacturing activity reports due later this week.

Offsetting some of that bearish sentiment was data from market intelligence firm Genscape estimating a drawdown of over 1 million barrels last week from the Cushing, Oklahoma delivery hub for U.S. crude, traders who saw the figures said.

Genscape's Cushing stockpile estimates are a precursor to official inventory data on U.S. crude due each Wednesday from the U.S. Energy Information Administration (EIA). Genscape had estimated draws of around 2 million barrels in each of the past two weeks.

U.S. crude stockpiles likely fell 500,000 barrels last week, the third straight week of drawdowns, a preliminary Reuters survey showed. [EIA/S]

"As far as the weekly EIA numbers are concerned, we expect only small stock shifts across all categories with any big surprises likely to tilt bullish," said Jim Ritterbusch of Ritterbusch and Associates, an oil markets advisory in North Wabash, Chicago.

"This won’t necessarily change overall U.S. balances, in which the total of crude and all U.S. products is approaching a record and is about 14 percent above a year ago," he said.- Reuters

Earlier Report: