Oil falls as China buys less, global demand seen weak

NEW YORK Fri Aug 10, 2012 4:21pm EDT

An attendant prepares to refuel a car at a petrol station in Rome January 4, 2012. REUTERS/Max Rossi

An attendant prepares to refuel a car at a petrol station in Rome January 4, 2012.

Credit: Reuters/Max Rossi

NEW YORK (Reuters) - Oil prices slipped on Friday on data showing China's crude oil imports dropped in July and on weaker global oil demand forecasts by the International Energy Agency.

The data added to concerns about demand for oil going forward and countered supportive hopes or expectations that central banks will introduce more stimulus measures aimed at lifting global economic growth.

Brent and U.S. crude posted their second straight weekly gains, with Brent up 3.68 percent and U.S. crude adding 1.6 percent.

Maintenance that should curb North Sea production and potential threats to supply from violence and tensions in the Middle East sent prices to 12-week peaks this week and lent support especially to Brent prices.

Brent crude's premium over U.S. crude ended at $20.08 based on settlements, reaching $20.42 intraday, the highest since April.

"Crude futures are retreating on both sides of the Atlantic ... after reports showed that exports from China collapsed in July and its net-imports of crude were the lowest since December," Addison Armstrong, senior director for market research at Tradition Energy, said in a research note.

Brent September crude eased 27 cents to settle at $112.95 a barrel. It recovered after falling intraday to $111.31 and finding support 2 cents below the 200-day moving average.

U.S. September crude fell 49 cents to settle at $92.87 a barrel, ending below the 100-day moving average of $93.06 after trading from $91.71 to $93.87.

Trading volumes continued to show summer-lull weakness, with turnover for Brent and U.S. crude below their 30-day averages.

Money managers raised their net long U.S. crude futures and options positions in the week to August 7, the U.S. Commodity Futures Trading Commission (CFTC) said. <ID:L2E8JAFWG>

They also raised net long positions in heating oil and gasoline, the data showed.

U.S. heating oil futures slumped more than 2 cents, while U.S. gasoline managed a higher settlement on support from refinery problems and Monday's fire that curbed output from a refinery near San Francisco, California.

Tropical depression number seven in the Atlantic could become a tropical storm before reaching the Caribbean, the U.S. National Hurricane Center said, another supportive element to keep investors cautious ahead of the weekend.

MIDDLE EAST TENSIONS

An Israeli newspaper reported that the country's prime minister and defense minister want to attack Iran's nuclear sites before the U.S. election in November, but lack crucial support within their cabinet and military.

The report added to the recent increase in speculation that war with Iran could be imminent.

The violent struggle in Syria continued to fuel the uncertainty about the region's oil supplies. Rebels fighting Syrian President Bashar al-Assad's forces in Aleppo promised a counterattack on Friday.

IEA CUTS DEMAND OUTLOOK

The International Energy Agency on Friday cut its estimates for global oil demand for several years, trimming its 2013 demand forecast by 400,000 barrels per day in the light of a "worrying slowdown" in global economic activity.

China's imports of crude oil sank in July to a nine-month low as refineries cut output due to reduced demand as growth in the world's second-largest economy sputtered.

Goods sent from export-sensitive China in July rose only 1 percent from year ago, well below expectations, and new loans were at a 10-month low, adding to worries about faltering growth in the world's No. 2 oil consumer.

(Additional reporting by Gene Ramos in New York, Alex Lawler in London and Florence Tan in Singapore, David Gregorio, Bob Burgdorfer and Marguerita Choy)

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Comments (3)
Ashishnfl wrote:
Speculators what about Geo politican in M.E and refinery fire in CA.? Raise the price i am not used cheap oil prices.

Aug 10, 2012 11:50am EDT  --  Report as abuse
AlkalineState wrote:
Wait for it….. Somali pirates will be back. In their raft. To take over a fleet of oil tankers because it turns out there is no way to defend merchant ships at sea. Other than Navies, but who knows if that would even work.

Good times. Wall Street and the oil companies are going to have to come up with some new material for supply disruption stories. Pirates, yawn. Iran is mad, yawn. Mysterious refinery fire, did that last week. How about…. “Oil virus strikes global supply.”

Aug 10, 2012 5:04pm EDT  --  Report as abuse
How does this effect balance with the big fire at the Chevron refinery in California? Other reports predict that oil price will rise because of that fire.

Aug 11, 2012 3:08pm EDT  --  Report as abuse
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