15 April 2013, London – UK Brent and US crude futures fell more than $1 on Monday, with the former slipping towards $101 a barrel, after Chinese and US data bolstered investors’ concerns of a slowdown in economic growth in the world’s top oil consumers.
Brent crude oil sank below $101 a barrel, a nine-month low, after bleak Chinese and US data stoked worries of a slowdown in economic growth in the world’s two biggest oil consumers.
China’s economic recovery unexpectedly stumbled in the first three months of 2013, with growth easing to 7.7% from 7.9% in the final quarter of last year. Economists had forecast 8% growth.
Prices tumbled across commodity markets – including gold, copper and silver – extending a rout that started on Friday following an unexpected contraction in US retail sales.
“The Brent oil price got caught up in the downward spiral experienced by precious metals on Friday and has fallen this morning to a nine-month low,” said Carsten Fritsch of Commerzbank. “What is more, poorer than expected data from China have fuelled new fears about demand.”
Brent fell $2.10 to $100.94 a barrel by 1130 GMT while US crude fell $2.86 to trade at $88.43 after earlier hitting a low for 2013 of $88.07.
Brent is threatening to break below $100 for the first time since early July and is down 15% from this year’s peak of $119.17 reached in early February.
But the sell-off has not unduly concerned Gulf Arab OPEC oil producers who see no need to cut supply to support prices.
The North Sea benchmark has traded mostly above $100 since early 2011, propped up by a standoff over Iran’s nuclear programme and unrest in Libya and worrying investors that inflated energy costs will hurt the fragile global recovery.
Friday’s weak US retail sales data followed forecasts for lower global oil demand growth for 2013 released last week by the IEA, the US Energy Information Administration and OPEC.
The World Bank on Monday scaled back its 2013 growth forecasts for developing East Asia and warned about possible over-heating in the region’s larger economies that could stoke inflation and asset bubbles, exacerbating investor concerns over oil demand.
The global lender, in its latest East Asia and Pacific Update, cut its GDP growth projection for China by 0.1 percentage points to 8.3% for 2013, citing Beijing’s ongoing efforts to restructure its economy.
Also pushing down oil prices, China’s implied oil demand fell to its lowest in seven months in March as big consumers held off from buying in anticipation of a cut in prices, while refiners scaled back crude runs and raised exports to trim high fuel stocks.
