Oil extends losses in Asia on profit-taking

PHOTO: Oil extends losses in Asia on profit-taking

SINGAPORE - Oil prices extended losses on profit-taking in Asian trade Friday following a recent rally powered by the US Federal Reserve's surprise decision to leave its aggressive stimulus programme unchanged.

Prices had surged after the Fed decided to continue with its $85 billion-a-month bond-buying programme to support US economic growth, beating forecasts it will announce a scaling down of the scheme.

New York's main contract, West Texas Intermediate (WTI) for October delivery, fell 30 cents to $106.09 a barrel in afternoon trade after sinking $1.68 at the close in New York Thursday.

The European benchmark, Brent North Sea crude for delivery in November, dipped seven cents to $108.69 after declining $1.84 in London the day before.

Research house Capital Economics said the US central bank's policy setting Federal Open Market Committee (FOMC) "looks as if it may now proceed even more cautiously than we had assumed".

"It seems likely that it will wait until its meeting in December at the earliest before announcing any tapering," it said in a note.

Other analysts said the return to production of Libyan oil fields and the easing of tensions in the Middle East after Syria agreed to a plan to put its chemical weapons arsenal under international control helped ease prices.

"Libya's El Feel and Sharara oil fields have reopened and will boost production levels, according to the oil ministry," Malaysian bank CIMB said in a note.

It said "Libya's production will rise to 700,000 to 800,000 barrels per day" following the reopening.

Protests by oil field and export terminal workers since July had crippled Libyan production.

Syria's decision to agree to a US-Russian deal on its chemical arms averted a Western military strike on the Assad regime to punish it for using the internationally-banned weapons on its own people.