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MTECHTIPS:-NYMEX crude down in Asia as U.S. stocks build, China demand weigh

MTECHTIPS:-NYMEX crude down in Asia as U.S. stocks build, China demand weigh

Crude oil prices dropped sharply in Asia on Thursday as oversupply in the U.S. and global markets pushed tprices down below $41 a barrel and investors sounded increasingly worried about weak China demand. On the New York Mercantile Exchange, WTI crude for October delivery traded down 0.88% to $40.91 a barrel. The latest Federal Reserve meeting highlighted concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month. The minutes showed policymakers continued to express broad concerns about lagging inflation and the weak world economy even as the U.S. job market improved further. Market expectations for a Fed hike in September fell from one in two to roughly one in three after the minutes were published. “It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their inflation target and seems like they’re probably not going to be willing to go in September” with a rate hike, said Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh. A delay in the start of the tightening cycle is seen as supportive of equities. However, concern about the strength of the global economy. Overnight, U.S. crude futures plunged to fresh six-and-a-half year lows before paring some losses in the afternoon session, following the strongest build in U.S. crude inventories in four months.

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