Oil falls to below $107 amid China growth concerns
Oil prices fell to below $107 a barrel on Thursday in Asia amid investor concerns that China's economy and crude demand may grow less than expected this year.business Updated: Mar 22, 2012 11:34 IST
Oil prices fell to below $107 a barrel on Thursday in Asia amid investor concerns that China's economy and crude demand may grow less than expected this year.
Benchmark oil for May delivery was down 71 cents to $106.56 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.20 to settle at $107.27 per barrel in New York on Wednesday.
Brent crude for May delivery was down 65 cents at $123.55 per barrel in London.
Chinese industrial production fell to a four-month low in March, according to HSBC's preliminary manufacturing purchasing managers index released Thursday. China is the world's second biggest consumer of oil behind the U.S.
"Weakening domestic demand continued to weigh on growth," HSBC said in a report. "China's slow down has yet to finish."
Crude has hovered between $105 and $110 for the last month, up from $75 in October, amid trader worries that a military strike by Israel or the U.S. on Iran's nuclear facilities could disrupt global supplies.
The jump in oil prices in recent months has increased the price of gasoline and other crude products and raised fears in Asia that inflation could quicken. Inflation concerns have kept policymakers from implementing aggressive stimulus measures despite signs of slowing economic growth, said Irvin Seah, an economist with DBS bank in Singapore.
"Oil prices will hit everyone, which is why despite the downside risks to growth, Asian central banks have been standing back rather than cutting interest rates," Seah said.
In other energy trading, heating oil was down 0.7 cents at $3.22 per gallon and gasoline futures slid 1.8 cents at $3.33 per gallon. Natural gas fell 2.2 cents at $2.34 per 1,000 cubic feet.