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Crude drops on China industrial output, reserve cut

Published 05/13/2012, 08:57 PM
Updated 05/13/2012, 09:00 PM
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Investing.com - Crude oil futures fell in Asian trading on Monday after China cut reserve requirements on the country's banks, a sign the economy needs a jolt.

Sluggish Chinese industrial output pushed the commodity down as well.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD95.73 a barrel, down 0.42%, off from a session high of USD95.71 and up from an earlier session low of USD95.36.

Late last week, China reported its industrial output climbed 9.3% in April from a year earlier, according to official data, below forecasts for a 12% gain.

Meanwhile, Chinese retail sales rose 14.1%, below market expectations for 15.2% expansion.

The news sent oil dropping on sentiment a cooling economy in China, once a red-hot growth market, will need less oil and derivatives to grow.

Meanwhile over the weekend, the People's Bank of China cut by 50 basis points banks' reserve requirement ratio effective May 18.

The news sent oil dropping, as China has fueled the commodity's rise in recent years, and a cool down would cut into demand.

European uncertainty pushed oil prices down as well.

Greek political leaders over the weekend failed to form a coalition government, with talk of a new round of elections growing.

Many see new elections as a sign Greece will grow increasingly likely to abandon the euro, which could have broader economic ramifications across the continent and crimp oil demand.

Meanwhile, Saudi Arabian Oil Minister Ali al-Naimi said the price of Brent crude, the European blend, remains elevated and should dip below USD100.

On the ICE Futures Exchange, Brent oil futures for June delivery were down 0.08% and trading at USD111.49 a barrel, up USD15.76 from its U.S. counterpart.







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