Crude oil declines on weak China data
BY JERRY A. DICOLO
NEW YORK -- U.S. crude futures fell Monday after disappointing economic data from China raised concerns about oil demand in the world's largest energy consumer.
Light, sweet crude for April delivery recently traded 67, or 0.7%, lower at $91.28/bbl on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell 73 cents to $110.12/bbl.
Oil prices fell as data on Chinese industrial production and retail sales for January and February came in below expectations. February inflation rose 3.2% from January, raising the possibility that China could tighten monetary policy in response.
Any signs of weakness in Asia are likely to weigh on crude oil futures, as the region is key to oil-demand growth amid flagging demand in Europe and the U.S.
"The pace of growth of the Chinese economy is not going to result in a growth spurt in oil consumption over and above what has already been projected," said Dominick Chirichella, an analyst at the Energy Management Institute.
Monday's decline pulled prices back from close to $92/bbl, and started the week lower after a 1.4% increase last week. Futures are hovering close to the $90/bbl level, but have failed to settle below the key psychological barrier after tumbling from close to $98 in early February.
Investors have been reluctant to wager on higher prices. U.S. stockpiles have risen nearly 6% this year, and are well above five-year average levels. At the same time, forecasts are calling for tepid oil-demand growth this year. The International Energy Agency last month cut it's global oil-demand forecasts for 2013 by 85,000 bopd.
Three major forecasting bodies, the U.S. Energy Information Administration, the Organization of the Petroleum-Exporting Countries and the IEA will all update monthly supply and demand forecasts this week.
Front-month April reformulated gasoline blendstock, or RBOB, recently traded 0.83 cent lower at $3.1952/gal retreating from a fresh five-month high notched Friday. April heating oil recently traded 0.63 cent lower at $2.9686/gal.
Dow Jones Newswires