Oil slips below $103 on weak China demand

LONDON Mon May 13, 2013 4:19pm IST

A worker pumps petrol into a customer's plastic bottles at a petrol station in Cuevas del Becerro, near Malaga, southern Spain March 4, 2011. REUTERS/Jon Nazca/Files

A worker pumps petrol into a customer's plastic bottles at a petrol station in Cuevas del Becerro, near Malaga, southern Spain March 4, 2011.

Credit: Reuters/Jon Nazca/Files

Related Topics

A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

LONDON (Reuters) - Crude prices slipped below $103 a barrel on Monday weighed by a stronger dollar and a drop to an eight-month low in oil demand in the world's second-largest consumer China.

China's refinery crude throughput fell 3 percent in April from March, its lowest daily rate since last September, as refineries entered maintenance season. Implied oil demand in the country was up 3.2 percent in April from a year earlier to about 9.6 million barrels per day (bpd), the lowest in eight months.

Brent crude slipped $1.07 cents to $102.84 barrel by 1010 GMT. U.S. oil fell $1 cents to $95.04 a barrel.

"The economic data in China is not yet providing upward support. It is not that it is weak, it is simply not sufficient to support a bullish trend," Harry Tchilinguririan, head of commodity market strategy at BNP Paribas, said.

A firm dollar, which makes oil more expensive for holders of other currencies, also weighed on prices.

The dollar has risen in recent days on speculation that the Federal Reserve could scale back its aggressive monetary stimulus aimed at supporting growth.

"The value of the dollar has weighed on the prices of all commodities, specially the more sensitive ones such as oil and gold," Tchilinguririan said.

SUPPLY WORRIES

The market remains bearish on the supply side, too.

"The oil market remains oversupplied, with U.S. crude oil stocks at a record level and gasoline stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region riding at a five-year high," according to analysts at Commerzbank.

The International Energy Agency (IEA) will release its monthly supply and demand outlook on Tuesday after OPEC last week increased its outlook for 2013 demand.

"In the medium-term Oil Market Outlook it will be publishing tomorrow, the International Energy Agency (IEA) is likely to revise its forecast for non-OPEC oil supply significantly upwards to take account of the rapid growth of shale oil production in the U.S. Positive news about demand is therefore needed if oil prices are to climb," Commerzbank said.

Renewed worries of a slowdown in demand growth from the world's top oil consumer the U.S. further weighed on oil prices.

The U.S. economy is expected to grow at a slower pace in the second and third quarters of this year, according to the Philadelphia Federal Reserve's quarterly survey of 42 forecasters, compared with its previous estimates.

(Additional reporting by Manash Goswami; Editing by Alison Birrane)

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

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Reuters India Mobile

Reuters India Mobile

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