Oil slips below $103 on weak China demand
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.
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)
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