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VOL. 38 | NO. 3 | Friday, January 17, 2014

Crude oil falls below $94 as China growth slows

PABLO GORONDI, Associated Press

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The price of oil fell below $94 a barrel Monday after a report showed China's economic growth declined in the last quarter of 2013.

By early afternoon in Europe, benchmark U.S. crude for February delivery was down 67 cents at $93.70 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, it rose 41 cents. The more heavily traded March contract was at $93.94 a barrel, down 65 cents.

Floor trading was closed and trading volumes below the norm because of the Martin Luther King Jr. Day holiday.

The Nymex oil contract began the year near $98 a barrel but retreated swiftly on indications of ample global supplies.

It regained some ground last week but retreated Monday after China announced economic growth slowed to 7.7 percent in the three months ending in December. Weaker factory output and other indicators suggested that the world's second-largest economy is slowing further.

"The modest Chinese economic data weighed on market sentiment ... adding pressure to crude oil prices," said analysts at Sucden Financial Research in a note to clients. "The strong U.S. dollar rally could add some pressure to the market."

The dollar's strengthening over the past week makes crude a less attractive investment for traders using other currencies.

Reports that Libyan officials intend to regain from rebels the control over oil export facilities in the country's east again raised the prospect of more crude feeding already brimming global stockpiles. However, similar pledges in past months have gone unfulfilled.

"The prospect of a growing oil supply is continuing to weigh on prices," said a research note from Commerzbank in Frankfurt. "Any seizure of the oil terminals by force would mean escalating the crisis and make it more difficult — if not impossible — to find any permanent solution to it."

Brent crude for March delivery, used to set prices for international varieties of crude, was down 20 cents to $106.28 on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline rose 2.62 cents at $2.6371 a gallon.

— Natural gas fell 11 cents to $4.272 per 1,000 cubic feet.

— Heating oil added 1.3 cents to $2.9475 a gallon.

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