Monday, March 12, 2012

Oil lower on Chinese demand concerns

SINGAPORE: Oil prices inched lower in Asian trade on Monday on concerns of slower economic growth in China, the world's largest energy user, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in April, shed 52 cents to $106.88 per barrel while Brent North Sea crude also for April was down 55 cents at $125.43 in morning trade.

Concerns over China's energy demand were stoked after customs data released Saturday showed the world's second largest economy swung to a huge trade deficit of $31.48 billion in February.

The Asian giant is normally a net exporter of goods.

"There has been a pullback in oil prices, mostly as a reaction to the huge trade deficit in China in February and concerns over slower growth in China," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

The deficit -- which is the largest for at least 12 years -- comes as Chinese firms' efforts to sell to the country's major trading partners in the West are suffering from the effects of the eurozone debt crisis and a weak US economic recovery.

The customs data come after statistics on Friday showed China's inflation rate slowing sharply in February and factory output growth also slipping.

China's weak trade figures outweighed bullish data showing that its monthly crude oil imports reached a record monthly high in February, analysts said.

It imported 23.64 million tonnes of crude oil last month, equivalent to 5.98 million barrels a day.

"The trade numbers are overshadowing bullish data showing that demand for crude in China remains very strong," said Shum.

View the original article here

Source From Channel News Asia

No comments:

Post a Comment