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UPDATE 6-Oil dips to $112, Chinese data worries
2012年5月11日 / 上午9点59分 / 6 年前

UPDATE 6-Oil dips to $112, Chinese data worries

* Oil looking at second straight week of losses

* China’s industrial output up 9.3 pct, vs forecast of 12 pct

* China inflation stays tame, room for easing seen

By Zaida Espana

LONDON, May 11 (Reuters) - Oil fell to $112 a barrel on Friday after a weak reading of industrial growth in China sparked worries about demand growth from the world’s number two oil consumer.

China’s industrial production in April grew at its slowest pace in nearly three years, which along with poor trade numbers on Thursday suggested the world’s No. 2 economy continues to slow after a weak first-quarter performance.

“Overnight the latest data out of China supported the view of not only the developed world economies slowing but the main economic growth engine of the world also continuing to slow ... China,” Dominick Chirichella, analyst at the Energy Management Institute, said.

By 1413 GMT, Brent June futures lost 50 cents to $112.23 a barrel. The benchmark, which fell to a three-month low on Monday, is headed for its second week of losses.

The U.S. light sweet June contract dropped 77 cents to $96.31 a barrel, resuming its downturn after ending a six-day slide on Thursday. U.S. crude is also on track for a second straight week of decline after touching its lowest level since mid-December on Wednesday.

“This morning, the continuation of softer Chinese data relative to market expectations has weighed on prices further,” Barclays analysts said in a note.

“The confused aftermath of the Greek election, ongoing concerns about the Spanish banking system and sovereign debt, weaker Chinese data and OPEC members’ continuing to pump at record levels keeps pressure on prices.”

Markets were also rattled by an unexpected $2 billion trading loss at Wall Street giant JP Morgan.

“The news out of JP Morgan last night started global markets on the weak side, while Chinese numbers were not that good,” analyst Olivier Jakob from Zug-headquartered Petromatrix said.

China’s implied oil demand fell in April to its lowest in six months and showed the first year-on-year decline in at least three years.

The data highlight the potential impact on China from the ongoing crisis in the euro zone, where Spain and Greece continue to fight mounting debt problems.

Global demand growth this year will remain broadly unchanged, the International Energy Agency (IEA) said in its monthly report, raising it by just 20,000 bpd from its previous report to 790,000 barrels per day.

The agency expected prices to remain high due to nuclear tensions between the West and Iran, despite a dramatic improvement in world supply resulting in a big build-up in stocks.


An improved global supply scenario has also weighed on oil prices. The Organization of the Petroleum Exporting Countries pumped 1.62 million barrels per day above its supply target in April, filling gaps caused by a large number of supply outages globally. Analysts are warning, however, that OPEC could trim output in response to swelling stockpiles.

“The unusually large global inventory builds in the first half of 2012 will lead to a prolonged slump in the need for OPEC oil, requiring substantial cuts in OPEC’s output,” Leo Drollas, chief economist for Centre for Global Energy Studies, told an industry conference in Singapore.

“These will come about but not quickly enough to prevent the price of oil from sagging.”

Brent hit highs above $128 in March amid fears about supply disruptions from major producer Iran following Western sanctions.

VTB Capital’s Andrey Kryuchenkov saw Brent supported at $112, with key short-term support at $110-$110.50, but does “not expect sustained gains at the moment”.

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