Oil prices sink in Asia on strong dollar, output fears

Singapore, Aug 29 (AFP) Oil prices tumbled in Asia todayon a strong dollar and after key OPEC producers downplayed theprospects of limiting output at a meeting next month. Iranian oil minister Bijan Zanganeh on Friday said hiscountry wanted its share of the crude market to return tolevels seen before Western nuclear sanctions were imposed onit 13 years ago. The comments suggest Tehran might not join possibleefforts by OPEC and Russia to cap production at the gatheringin Algeria. Earlier, Saudi Arabia’s energy minister Khalid Al-Falihalso downplayed hopes for a cut in production. At around 0850 IST, US benchmark West Texas Intermediatewas down 53 cents, or 1.11 per cent, at USD 47.11 and Brentfell 52 cents, or 1.04 per cent, at USD 49.40. "Oil prices came under pressure following media reports ofthe Saudi oil minister’s comments that there was limitedpossibility of any agreement for major intervention during theplanned informal meeting of OPEC members next month," said EYoil and gas analyst Sanjeev Gupta. Saudi Arabia, the biggest producer in the Organization ofthe Petroleum Exporting Countries, advocated an output freezeearlier this year but no deal was reached after Iran, which isjust emerging from sanctions, refused to join. The strictures, aimed at curbing Tehran’s nuclearprogramme, were lifted in January. "After a week of yoyo-ing on OPEC chatter and geopoliticalconcerns and with the jury still out on an OPEC productionfreeze, the near-term fundamentals along with supply concerns,will dominate price action on oil this week," said StephenInnes, a senior trader at OANDA. Gupta said comments by Fed chair Janet Yellen on Fridaysignalling the possibility of a US interest rate hike withinthis year "boosted the dollar index and applied pressure oncrude prices". Analysts said Yellen’s remarks raised the likelihood thatthe Fed will lift rates by the end of the year. A strong dollar typically dents demand for oil as itbecomes more expensive for anyone with weaker currencies.(AFP)CPS