BEIJING, Feb 10: Brent fell below $58 a barrel on Tuesday after China’s consumer inflation came in at a five-year low for January, raising worries about oil demand in the world’s second-largest economy.
The International Energy Agency (IEA) also said the United States will remain the world’s top source of oil supply growth up to 2020, defying expectations of a dramatic slowdown in shale output and keeping fears of a continuing glut at the forefront. Brent crude slipped 80 cents to $57.54 by 0600 GMT, ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011. U.S. crude futures fell 79 cents to $52.07. ‘The drive down today would most probably be due to weak China CPI figures which turned out to be lower than expectations,’ said Daniel Ang of Singapore-based Phillip Futures in the Reuters Global Oil Forum, referring to monthly consumer price index data released on Tuesday.
China’s January inflation hit a five-year low, with the CPI rising just 0.8 percent from a year before, adding pressure on policymakers to inject more stimulus to underpin growth. Oil prices had received a boost on Monday after the release of a monthly report by the Organization of Petroleum Exporting Countries (OPEC) forecasting 2015 demand for its oil rising to 29.2 million barrels per day (bpd). The IEA report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, but said U.S. shale oil output growth would only pause amid the current price collapse before regaining momentum. U.S. crude fell, also snapping three days of gains, after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week. ‘Another report of strong builds in inventories in this week’s EIA market report could halt oil’s rally,’ ANZ bank said on Monday, referring to the U.S. Energy Information Administration’s stockpiles data release due on Wednesday. Elsewhere, a strike by security guards that closed Libya’s eastern oil port of Hariga, the country’s last functioning export port apart from two offshore fields, ended late on Monday. (AGENCIES)
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