21 June 2013, News Wires – Oil fell towards $101 a barrel on Friday as a modest rally gave way to further focus on slowing demand and ample supply, as well as the US Federal Reserve’s plans to wind down its stimulus programme.
Oil fell towards $101 a barrel on Friday as a modest rally gave way to further focus on slowing demand and ample supply, as well as the US Federal Reserve’s plans to wind down its stimulus programme.
Brent crude on Thursday posted its biggest daily loss since November during a broader market rout, in which for oil, demand growth concerns following weak manufacturing data from China added further pressure.
Giving up earlier rises, Brent was down 85 cents to $101.30 by 1403 GMT and traded as low as $101.18, the lowest since 3 June. US oil was down 43 cents at $94.71. On Thursday, Brent ended down $3.97 and US oil finished $2.84 lower.
China’s factory activity weakened to a nine-month low in June as demand faltered, adding to data pointing to a sluggish economy and raising the chances the country could miss its growth target of 7.5% for this year.
“A slowing of China’s manufacturing sector certainly suggests that oil demand growth from the world’s largest oil demand growth engine will also certainly slow,” said Dominick Chirichella of Energy Management Institute. China is the world’s second biggest oil consumer.
“The likelihood of supply continuing to outstrip demand is going to continue forward.”
In a sign that supply is ample, a US Energy Information Administration report this week showed US crude stocks rose by 313,000 barrels last week, against expectations of a 500,000 barrel decline. The US is the top oil consumer.
Prices drew some support from concern about potential supply disruptions in the Middle East, with violence in Syria threatening to engulf neighbouring countries.