Oil slips closer to $103 on China slowdown signs

AP News
Posted: Apr 11, 2014 10:02 AM

The price of oil slipped closer to $103 a barrel on Friday as recent signs of sputtering economic growth in China suggested demand for crude could weaken.

Other factors influencing crude supplies included a report that U.S. crude reserves rose to a 38-year high and the delayed reopening of export terminals in Libya.

By early afternoon in Europe, benchmark crude for May delivery was down 15 cents to $103.25 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, the Nymex contract fell 20 cents to settle at $103.40.

Brent crude, a benchmark for international oil prices, was down 14 cents to $107.32 a barrel on the ICE Futures exchange in London.

Oil prices retreated from a five-week high this week after China reported shrinking exports and imports for March, raising concerns about slowing growth in the world's No. 2 economy. Investors are nervously awaiting the release of first-quarter economic data next week that will shed further light on the situation.

Meanwhile, supplies are ample. The U.S. Energy Department said the country's crude oil reserves rose for a fourth straight year to their highest level since 1976 as hydraulic fracturing methods have helped drillers unlock oil trapped in rock formations.

Traders were also watching for the reopening of four Libyan export terminals in Libya, which have been delayed as the central government and militias who had occupied the facilities have failed to reach a definite agreement.

"The return (or not) of Libya will be key for the third-quarter oil balances," said Olivier Jakob of Petromatrix in Switzerland.

Separately, the International Energy Agency kept its 2014 demand forecast virtually unchanged in its latest monthly report on oil markets, with a slight fall in Russian demand offset by higher consumption in Asia.

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At the same time, the Paris-based IEA said that OPEC countries would need to raise their production by about 600,000 barrels a day from their average of 29.6 million barrels a day in March in order to meet demand for their crude oil estimated at 30.2 million barrels a day for the rest of the year.

In other energy futures trading in New York:

— Wholesale gasoline added 0.67 cent to $3.0146 a gallon.

— Natural gas fell 1.2 cents to $4.643 per 1,000 cubic feet.

— Heating oil fell 0.4 cent to $2.935 a gallon.