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    Home » Oil slides over China’s ‘uneven recovery’

    Oil slides over China’s ‘uneven recovery’

    March 12, 2013
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    12 March 2013,London – The price of UK Brent crude oil fell on Monday, pressured by disappointing economic data from China, the world number-two oil consumer China, while technical support and a dollar pullback limited losses and helped US crude settle slightly higher.

    China’s National Bureau of Statistics said on Saturday that the consumer price index rose 3.2% in February from a year earlier, versus expectations of a 3% rise, while annual industrial production growth in January and February, combined at 9.9%, was the lowest since October 2012, Reuters reported.

    Saudi Arabia produced more crude oil in February than it did the previous month, even while lowering the amount supplied to customers, an industry source told the news wire on Saturday, with the news of more production helping pressure crude futures on Monday.

    Before it turned weaker during the session a stronger dollar put pressure on dollar-denominated oil and copper after Friday’s better-than-expected US jobs report and ratings agency Fitch’s downgrade of Italy’s credit rating.

    “The crude oil market tipped back to the downside … as China’s industrial output fell short of expectations and Saudi Arabia was reportedly producing more in February than the month before,” Tim Evans, energy futures specialist at Citi Futures and OTC Clearing in New York, said in an email to clients.

    Brent April crude fell 63 cents to settle at $110.22 a barrel, trading as low as $109.53 during the session.

    Support was expected ahead of the front-month Brent 200-day moving average of $109.26.

    US April crude rose 11 cents to settle at $92.06 a barrel, but continued to seesaw in post-settlement trading. US crude recovered after falling more than $1 to $90.89 – running into support just above the 100-day moving average of $90.84.

    The crack spread for US gasoline against US crude continued to trade at record highs, reaching $45.52 on Monday before dropping back.

    A crack spread is the differential between a petroleum product price and a crude oil price, used to measure refiner profit margins.

    Also helping limit losses were the political conflicts in the Middle East. Syrian rebels broke through government lines to ease a siege of their positions in the strategic central city of Homs despite coming under fierce aerial bombardment, opposition campaigners said.

    Syrian oil production is not considered significant, but investors worry the unrest could spread to major oil exporters in the region.

    The ongoing geopolitical tensions over Iran’s controversial nuclear program have also supported crude oil futures, helping to keep Brent futures above $100 through most of 2012 and this year.

    Market participants awaited monthly oil market reports from the Organisation of the Petroleum Exporting Countries (Opec) and the Energy Information Administration (EIA) on Tuesday and the International Energy Agency on Wednesday.

    Investors also will eye fresh snap shots of US oil inventories starting, with data from the American Petroleum Institute due at 4:30 p.m. EDT (2030 GMT) on Tuesday.

    US crude oil inventories were expected to have risen last week on higher imports, while gasoline and distillate stockpiles were expected to be lower, a Reuters survey of analysts on Monday showed.
    The weekly oil inventory report from the EIA is due on Wednesday morning

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