Dollar weakens in Asian trade

TOKYO: The dollar weakened in Asian trade Thursday with few trading cues as firms adjust their month-end forex positions, dealers said, while concerns about global growth hung over markets.

The greenback had dropped below the 101-yen level in early Tokyo trade as the Nikkei 225 plunged more than three percent -- yen trade and the benchmark stock index are closely interlinked as the value of the Japanese currency directly affects the competitiveness of the country's exporters.

But by midday, the dollar crept back to 101.07 yen against 101.13 yen in New York late Wednesday.

"No news are behind the move, just flows," a senior dealer at a major Japanese bank told Dow Jones Newswires.

"The correlation between movements in the Nikkei and the dollar/yen appear to be gradually weakening. I think support at the 100-yen level remains strong."

Japanese firms are major currency sellers and buyers as part of running their overseas operations with euro trade also affected by such deals on Thursday, dealers said.

The European single currency gained to $1.2960 from $1.2942 in US trade, while it strengthened against the Japanese unit to 131.01 yen from 130.87 yen.

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Dollar slips in Asian trade after US rally

TOKYO: The dollar lost ground in early Asian trade on Wednesday after flying on fresh data that showed US consumer confidence and home prices were on the rise.

The figures are the latest evidence that the world's biggest economy could be mounting a recovery, paving the way for the US Federal Reserve to roll back its huge bond-buying programme known as quantitative easing.

Dollar trade has been influenced by differing views over comments from Fed chairman Ben Bernanke last week, although dealers generally viewed the central bank chief as saying the Fed needed to see a few months' more data before it would tighten policy.

In Tokyo morning trade, the dollar bought 102.14 yen, slipping from 102.32 yen in New York late Tuesday.

"The dollar is becoming the main driver of the (dollar/yen) pair and focus will increasingly be on the Fed's stance toward its bond buying and indicators like US jobs data," Kengo Suzuki, forex strategist at Mizuho Securities, told Dow Jones Newswires.

The greenback jumped Tuesday following the release of the S&P/Case-Shiller report on March US housing prices, showing they were up 10.9 percent in over March 2012, the largest year-on-year increase since April 2006.

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Oil turns higher in Asian trade

SINGAPORE: Oil prices rose in Asian trade Thursday, boosted by stronger US demand but caution over a slowing Chinese economy limited gains, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in July, added 30 cents to $94.04 a barrel in the afternoon and Brent North Sea crude for July delivery gained 17 cents to $103.21.

"Prices have bounced up in reaction to a drop in US inventories," Kelly Teoh, market strategist at IG Markets in Singapore, told.

"While the market has been very data-sensitive, the overall tone for commodities still remains soft."

The US Department of Energy on Wednesday said stockpiles in the United States plunged 6.3 million barrels in the week ended May 31, much more than analysts expected, with the average estimate pegged at a 400,000 drop.

A decline in stockpiles supports crude prices as it suggests a pick-up in demand, which traditionally rises during the US summer driving season when Americans take to the roads for their holidays.

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Oil prices up in Asian trade

SINGAPORE: Oil prices rose in Asia on Wednesday, with dealers buying cheaper crude ahead of key economic releases from the United States, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude

for delivery in July added 43 cents to $93.74 a barrel and Brent North Sea

crude for July increased 13 cents to $103.37.

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Oil up in Asian trade

SINGAPORE: Oil was up in Asia on Friday, with dealers buying up the commodity after a drop in prices over the past few days, analysts said.

New York's main contract, light sweet crude for delivery in July increased two cents to $93.63 a barrel and Brent North Sea crude for July delivery added ten cents to $102.29 in mid-morning trade.

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The South China Sea is an important world energy trade route

April 4, 2013

Stretching from Singapore and the Strait of Malacca chokepoint in the southwest to the Strait of Taiwan in the northeast, the South China Sea is one of the most important energy trade routes in the world. Almost a third of global crude oil and over half of global liquefied natural gas (LNG) passes through the South China Sea each year.

The Strait of Malacca is the shortest sea route between African and Persian Gulf suppliers and Asian consumers. The strait is a critical transit chokepoint and has become increasingly important over the last two decades. In 1993, about 7 million barrels per day (bbl/d) of oil and petroleum products (20% of world seaborne oil trade) passed through the Strait of Malacca, according to the Center for Naval Analysis. EIA estimates that by the end of 2011, trade through Malacca was greater than 15 million bbl/d, or about one-third of all seaborne oil. In comparison, the world's most important chokepoint for maritime transit, the Strait of Hormuz between the Persian Gulf and Arabian Sea, had an oil flow of about 17 million bbl/d in 2011 (see World Oil Transit Chokepoints). Average daily oil consumption worldwide in 2011 was about 88.3 million bbl/d.

A significant amount of crude oil arriving in the Strait of Malacca (1.4 million bbl/d) goes to terminals in Singapore and Malaysia instead of continuing on to the South China Sea. After processing, this crude oil is shipped out again to Asian markets through the South China Sea as refined petroleum products, such as motor gasoline and jet fuel. The rest of the crude oil passes through the South China Sea to China and Japan, the two largest energy consumers in Asia. Finally, about 15% of crude oil moving through the South China Sea goes on to the East China Sea, mostly to South Korea.

Crude oil flow in the South China Sea also comes from intraregional trade, particularly from Malaysian, Indonesian, and Australian crude oil exports. Intraregional trade is distributed evenly among Singapore, South Korea, Japan, and China, with smaller amounts going to other Southeast Asia countries.

The South China Sea is also a major destination for LNG exports. About 6 trillion cubic feet (Tcf) of liquefied natural gas, or more than half of global LNG trade, passed through the South China Sea in 2011. Half of this amount continued on to Japan, with the rest of it going to South Korea, China, Taiwan, and other regional countries. Almost 75% of all LNG exports to the region came from Qatar, Malaysia, Indonesia, and Australia.

With growing demand for natural gas in East Asia, the South China Sea's share of global LNG trade will likely increase in the coming years. Moreover, Japan has increased its LNG imports to replace the energy lost from nuclear power outages following the Fukushima crisis. Much of the new supply will come through the Strait of Malacca, although some countries like Indonesia are investing in their own LNG export capacity.

Finally, large quantities of coal from Australia and Indonesia, the world's two largest coal exporters, pass through the South China Sea to markets around the world, especially to China, Japan, and India. These coal shipments include both steam coal used for generating electricity and process heat as well as metallurgical coal that is a key ingredient in primary steel production.

For more information, see the South China Sea Regional Analysis Brief.

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