The combination of a stronger USA dollar and the prospects of a surge in oil output saw WTI oil decline by 3%.
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The Australian dollar gained against U.S. dollar on Monday as investors avoided taking major positions as investor focus will shift to Federal Reserve Chair Janet Yellen’s speech on Friday at the annual central bankers’ meeting in Jackson Hole, Wyoming, to assess the odds of an interest rate hike in coming months.
ANALYST’S TAKE: “Recent market price action suggests that nervousness about Fed policy may persist ahead of the Jackson Hole symposium”, Citigroup economists said in a report. The Japanese benchmark index finished up at 16,598.19 on Monday.
The euro turned slightly negative, losing 0.04% against the dollar at $1.1323.
The Australian dollar was up 0.2 percent at $0.7642, moving up on the coattails of the kiwi.
Goldman Sachs analysts in a note on Tuesday that the comments from the central bank were consistent with Goldman’s forecast of a gradual reduction in the official cash rate to 1.50 percent by February 2017, with the RBNZ “to remain highly sensitive to news flow on inflation expectations and the NZD in the interim”.
WTI’s more active second month position, October, closed down $1.70, or 3.6 percent, at $47.41 a barrel.
Brent crude LCOc1 lost 40 cents to $48.76 a barrel.
On the Shanghai Futures Exchange, gold for December delivery was last unchanged at 287.20 yuan per gram, and the December silver was flat at 4,224 yuan per kilogram.
The broader Topix was 0.3 percent lower at 1,300.25, and the JPX-Nikkei Index 400 was also down 0.3 percent at 11,686.11.
Reuters reported China’s July diesel and gasoline exports soared 181.8 percent and 145.2 percent, respectively, on-year, which put pressure on refined product margins.
Elsewhere, the USA dollar slipped against other major currencies as the yield on the 10-year U.S.Treasury note fell to 1.55% from around 1.60%. In the US, drillers added 10 oil rigs in the week to August 19, marking eight straight weeks of rig additions, while Iraq said it plans to increase its export of crude oil, said Reuters.
Company news: Drug giant Pfizer Inc.(PFE) confirmed it plans (http://www.marketwatch.com/story/pfizer-agrees-to-buy-cancer-behemoth-medivation-for-14-billion-2016-08-22) to buy biotech Medivation Inc.(MDVN), in a move aimed at adding a leading prostate-cancer drug to Pfizer’s portfolio.
Oil Search’s first-half profit fell 89 percent from previous year and revenues declined 33 percent.
Caltex Australia said its first-half profit decreased 15% from past year, while underlying profit rose 1%.
European stocks fell 0.11 percent, having received a temporary boost in early trading by Syngenta after its proposed takeover by ChemChina was approved by USA regulators.
Oil Search shares fell 0.81 percent. Santos (ASX:STO-AU) shares reversed earlier losses to trade up 0.11 percent. National Australia Bank is down 0.2%.
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On Monday, the Dow Jones industrial average fell 23 points, or 0.1% to 18,529.42 The Standard & Poor’s 500 index slipped 1.23, or 0.1%, to 2182.64, and the Nasdaq composite index rose 6.22, or 0.1%, at 5244.60. Asian stocks closed lower, while US stock futures pointed to a weaker open for Wall Street shares.
