Crude falls as China growth slows
Published 21/10/2010 | 10:18
Oil fell amid concern that demand is weakening in the world’s two biggest energy consumers after reports showed that China’s economy grew at the slowest pace in a year and US fuel supplies increased last week.
Futures gave up some of yesterday’s gains of more than $2 a barrel after a government report showed that China’s economic growth slowed to 9.6pc in the third quarter.
US petroleum stockpiles increased unexpectedly last week, an Energy Department report showed yesterday.
“After yesterday’s $2 rally, it is not abnormal to see some profit-taking,” said Andy Sommer, a senior analyst at EGL in Dietikon, Switzerland.
Oil for December delivery lost as much as 69 cents, or 0.8pc, to $81.85 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.11 at 9:41am London time.
The November contract surged $2.28 yesterday, the biggest gain in 11 weeks, to expire at $81.77.
Brent crude for December settlement dropped as much as 60 cents, or 0.7pc, to $83 a barrel on the London-based ICE Futures Europe exchange.
China’s gross domestic product growth slowed from 10.3pc in the second quarter and 11.9pc in the first three months of the year.
Monthly crude oil processing volume increased the least in 18 months in September, according to faxed data from China Mainland Marketing Research Co.
Refineries in the world’s biggest energy user processed 34.9 million metric tons of crude last month, or about 8.5 million barrels a day.
That’s up 6.6pc from a year ago, the smallest year-on-year gain since March 2009.
An Energy Department report yesterday showed US inventories of petroleum rose 1.12 million barrels last week.
They were forecast to fall 1.5 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey.
“Inventories of crude and products are still high, so there is no fear of a global shortage,” said Ken Hasegawa, a commodity derivative sales manager at broker Newedge in Tokyo.
Crude supplies climbed 667,000 barrels to 361.2 million. Stockpiles are at their highest level in the past 10 years for this time of year.