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Crude oil futures edge lower after China data disappoints

Published 03/11/2013, 05:00 AM
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Investing.com - Crude oil futures were lower during European morning hours on Monday, after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production and retail sales slowed.

Losses were limited amid indications the U.S. economic recovery is gaining momentum.

On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD91.55 a barrel during European morning trade, down 0.45% on the day.

New York-traded oil prices fell by as much as 0.5% earlier in the day to hit a session low of USD91.53 a barrel.

Official data released over the weekend showed that consumer prices in China rose to a 10-month high of 3.2% in February from a year earlier, above expectations for a 3% increase and accelerating sharply from a 2% rate of increase in January.

The faster-than-expected increase in the rate of inflation was likely to dampen hopes that Beijing will introduce fresh easing measures in the near-term to boost economic growth.

Separate reports showed that industrial production rose 9.9% in February, less than the expected 10.5% increase and following a 10.3% rise the previous month.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Prices remained support after the Department of Labor said Friday the U.S. economy added 236,000 jobs last month, blowing past expectations for an increase of 160,000.

The unemployment rate ticked down to 7.7%, the lowest level since December 2008, from 7.9% in January.

Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest crude-oil consumer.  

An improving economy is generally correlated with increased demand for oil and fuel products like gasoline.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery declined 0.65% to trade at USD109.53 a barrel, with spread between the Brent and crude contracts standing at USD17.98 a barrel, the lowest since late-January.

Brent prices came under pressure after a pipeline system used to transport North Sea oil resumed operation following a five-day halt last Thursday.

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