Oil slips as China inflation picks up
Oil prices fell on Friday on concerns that China’s government could limit economic stimulus measures because of higher inflation.
Benchmark oil dropped 57 cents to US$93.25 a barrel in afternoon trading in New York. A day earlier, a report showing a rebound in China’s trade growth boosted oil because it suggested a possible recovery in global demand.
Friday’s data showed China’s inflation spiked to a six-month high in December. Higher inflation could hamper Beijing’s ability to support the country’s economic recovery.
Reports that Saudi Arabia produced 9 million barrels of crude oil in December, 500,000 barrels less than the previous month, kept prices from falling further. Official figures will be released next Wednesday in OPEC’s monthly oil market report.
Brent crude, used to price international varieties of oil, was down US$1.49 to US$110.40 per barrel on the ICE Futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
— Wholesale petrol fell 5 cents to US$2.74 a gallon.
— Heating oil was down 4 cents to US$3.01 a gallon.
— Natural gas rose 12 cents to US$3.33 per 1,000 cubic feet, its second day of strong gains after starting the year with a decline of about 7 per cent.