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Oil slips to near $91 after China tightening move

17 Jan 2011 10:39 | Power market

Oil prices slipped to near $91 a barrel Monday in Asia after China's latest move to restrict lending raised the prospect of weaker demand for crude.

Benchmark oil for February delivery was down 25 cents at $91.29 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 14 cents to settle at $91.54 a barrel on Friday.

Trading was subdued ahead of a Federal holiday in the U.S. on Monday.

China, the world's biggest energy consumer, on late Friday raised the amount of money banks must keep on reserve for the seventh time in a year — its latest move to curb lending and tame inflation.

That suggested China's economic growth could slow further, denting demand for imported oil, which is trading near a two-year high, and other fuels.

Demand in the U.S. is also weaker at this time of year as New Year holidays are over and Americans are driving less. But any positive economic news from the U.S., the world's No. 1 economy, could lift oil to near $93 a barrel, energy consulting firm Cameron Hanover said in a report.

In other Nymex trading in February contracts, heating oil fell 0.2 cent to $2.64 a gallon and gasoline added 0.2 cent to $2.497 a gallon. Natural gas futures gained 1 cent to $4.49 per 1,000 cubic feet.

Brent crude rose 13 cents to $98.51 a barrel on the ICE Futures exchange in London.


Source:  chron

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