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Oil Report

Tokyo rubber down 1.7 pct, dips below 330 yen

TOKYO, Aug 1 (Reuters) - Tokyo rubber futures slipped 1.7 percent on Friday, giving up the previous day’s gains on weaker crude oil prices, but an absence of fresh factors kept prices within recent ranges.

* Traders said fears of a decline in demand for rubber on news of sluggish car sales are also weighing on the market as rubber’s major use is in the production of tyres.

* “Stocks are still low at the moment, which is one reason for the market’s backwardation,” a Tokyo-based trader said.

* But the actual demand and supply situation will become apparent a little later and this could hit prices, he said.

* The key Tokyo Commodity Exchange rubber contract for January delivery <0#JRU:> was trading at 327.8 yen per kg at 0424 GMT, after earlier hitting a low of at 326.7 yen, down 5.8 yen or about 1.7 percent.

* Rubber prices have mostly traded on both sides of the 330 yen mark since they fell below 340 yen in mid-July.

* Oil prices fell further towards $123 a barrel on Friday as weak U.S. economic data prompted selling by funds worried about falling energy demand in the world’s top energy user.

* The dollar was little changed from late U.S. trade near 107.80 yen JPY= after hitting a one-month peak of 108.34 yen on Wednesday.

* In the physical market, traders said supplies from Indonesia, the world’s second-largest producer, might decline a touch due to wintering in the southern side of Sumatra. Latex output falls during wintering.

* Traders expressed little concern however, as they said production from Thailand should make up for any loss from Indonesia if the weather in the world’s top rubber producer remains favourable.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH THURSDAY

Grade Price Change

Thai RSS3 (August) $3.15/kg unchanged

Thai RSS3 (Sept) $3.15/kg unchanged

Thai STR20 (August) $3.15/kg -$0.01

Thai STR20 (Sept) $3.15/kg -$0.01

Malaysia SMR20 (August) $3.15/kg -$0.01

Malaysia SMR20 (Sept) $3.15/kg -$0.01

Indonesia SIR20 (August) $1.41/lb -$0.01

Indonesia SIR20 (Sept) $1.41/lb -$0.01

Thai USS3 98 baht/kg unchanged

Thai 60-percent latex (drums, Aug) $2,180/tonne +$10

Thai 60-percent latex (bulk, Aug) $2,030/tonne unchanged (Reporting by Miho Yoshikawa)

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