Brent crude holds above $111 ahead of China data

SINGAPORE Tue Jan 8, 2013 12:55pm IST

A worker pumps petrol into a customer's car at a fuel station in Sidon, southern Lebanon, February 25, 2011. REUTERS/ Ali Hashisho/Files

A worker pumps petrol into a customer's car at a fuel station in Sidon, southern Lebanon, February 25, 2011.

Credit: Reuters/ Ali Hashisho/Files

Related Topics

SINGAPORE (Reuters) - Brent crude futures steadied above $111 per barrel on Tuesday, trading in a tight range, as investors opted for caution ahead of key data from China and a European Central Bank meeting this week.

Investors will be closely monitoring China's trade data for December due on Thursday, as well as fourth-quarter economic growth numbers on January 18, for confirmation that the world's biggest energy consumer is on a steady but slow path to recovery.

Front-month Brent futures slipped 19 cents to $111.21 per barrel by 0659 GMT, after ending mostly steady in the previous session. U.S. crude slid 10 cents to $93.09 per barrel, erasing the previous session's gain.

The outlook for oil prices this year will be coloured by concerns that global supplies will outstrip demand, said Tony Nunan, oil risk manager for Mitsubishi Corp in Tokyo.

"The global economy is the big thing for oil prices, and it's still not clear which way it's headed," said Nunan.

"The big issues are China's growth and how OPEC manages the oversupply."

The International Energy Agency (IEA) last month forecast demand in 2013 will rise by 865,000 barrels per day while supply from non-OPEC countries will rise by 890,000 barrels per day, driven by a jump in U.S. shale oil production.

ECONOMY AND DEMAND

In the short term, however, investors will be focusing on key economic events due this week.

China's trade numbers may show export growth rebounded from three-month lows in December, although weak demand in the United States and Europe, the country's two biggest customers, may temper the recovery.

Fourth-quarter GDP data due next week may give a brighter picture. A Reuters poll showed the economy may have grown 7.8 percent in October-December versus 7.4 percent in the previous quarter, snapping seven quarters of weaker expansion.

ECB policymakers will meet on Thursday as well and economists polled by Reuters were split on whether the bank would cut rates in 2013 after the regional economy shrank for three straight quarters last year.

"There are now very clear indications that this slowdown has come to an end," Credit Suisse analysts said in a report.

"The latest leading economic indicators show that global growth is gaining again - particularly in key commodity consuming countries such as China and the U.S."

Later in January, U.S. Federal Reserve policymakers are scheduled to meet amid talk that the bank may halt its quantitative easing in 2013, rather than 2014, sending jitters through markets.

INVENTORY

Investors will also be awaiting inventory data from the United States due Tuesday and Wednesday.

Commercial crude oil stockpiles may have fallen by 300,000 barrels on average in the week ended January 4 as Gulf Coast refiners cut imports for year-end tax purposes, a preliminary Reuters poll of four analysts showed.

The previous week's data, which showed that imports dropped by the biggest margin in a decade, had triggered worries of weak demand and sent U.S. oil prices lower. (Editing by Clarence Fernandez and Tom Hogue)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage