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REFILE-UPDATE 3-Oil flat around $108; China data offsets supply jitters
March 13, 2014 / 6:01 AM / 4 years ago

REFILE-UPDATE 3-Oil flat around $108; China data offsets supply jitters

(Changes name of company that Andy Sommer works for after merger to Axpo Trading in paragraph 7)

* China’s Jan-Feb economic activity cools to multi-yr lows

* China’s Jan-Feb implied oil demand down 3.1 pct on yr to 9.98 mln bpd

* U.S. surprises oil market with sale from strategic reserve

* EU moves toward sanctions on Russians, Obama meets Ukraine PM

By Simon Falush

LONDON, March 13 (Reuters) - Oil was steady around $108 a barrel on Thursday as weaker-than-expected Chinese data offset supply disruption worries prompted by the ongoing stand-off between Russia and Western powers over Ukraine.

Brent crude was down 14 cents to $107.88 at 0913 GMT, after ending 53 cents down at its lowest in a week. U.S. crude fell 5 cents to $97.94.

The U.S. contract plunged more than 2 percent on Wednesday in its biggest drop in two months on a surprise plan for a test release of strategic oil reserves, while weekly data showed a big rise in crude stockpiles.

In the first test sale of crude from its emergency oil stockpile since 1990, the United States is offering a modest 5 million barrels in what some observers saw as a message to Russia from the Obama Administration.

The European Union agreed on a framework on Wednesday for its first sanctions on Russia since the Cold War, a stronger response to the Ukraine crisis than many expected and a mark of solidarity with Washington in the drive to make Moscow pay for seizing Crimea.

Worries that escalation of the dispute could lead to disruption of supplies of oil from Russia, one of the world’s largest oil producers, has underpinned prices.

“Ukraine is a supportive factor as are slightly higher global demand figures from OPEC,” said Andy Sommer, analyst at Axpo Trading in Dietikon, Switzerland.

Sommer was referring to figures from the Organization of the Petroleum Exporting Countries which stated world oil demand would increase more than expected in 2014, raising its prediction for a second straight month as economic growth picks up in Europe and the United States.

However on a shorter term outlook, demand looks more subdued, Sommer said.

“There are demand worries around China and it’s a weaker seasonal period for demand, especially in the United States now that the heating oil season is coming to an end,” Sommer said.

Implied oil demand in China, the world’s second biggest oil consumer, fell 3.1 percent in the January-February period from a year earlier to roughly 9.98 million barrels per day (bpd), according to Reuters’ calculations based on preliminary government data. (Reporting by Simon Falush; editing by Jason Neely)

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