Oil below $104; concerns outweigh China data
London, May 8, 2013
Oil slipped below $104 a barrel on Wednesday as a rise in crude imports by China and a surprise jump in German industrial output could not shake off persistent concerns about global demand.
China's daily crude imports in April rose 3.7 per cent from a year ago and 3.5 per cent from March, customs data showed, as refiners in the world's number two customer took advantage of lower prices to replenish stocks.
German industrial output unexpectedly rose 1.2 per cent on the month in March, contrasting with recent gloomier data.
Brent slipped 55 cents to $103.85 a barrel by 1115 GMT, after reaching its highest level in over a month on Tuesday. US oil dropped 5 cents to $95.57.
"We are lacking the catalyst in the numbers to suggest we could go back to the highs reached earlier this year," Olivier Jakob, analyst at Petromatrix, said.
The strong data boosted world shares and other commodities despite doubts about the quality of the Chinese data.
Oil prices remained under pressure after the US Energy Information Administration's (EIA) on Tuesday estimated ample supplies in 2013 and 2014.
"Even with the news from China and Germany, the background is still pretty weak on the oil side as the market is well supplied and we are still in a seasonal demand low," said Simon Wardell, analyst at Global Insight.
Prices may stay under pressure, given projections of a well-supplied market and bleak global demand.
The EIA cut its forecast for demand growth for this year to 890,000 barrels per day (Bpd) and pared its 2014 estimate to 1.21 million bpd, or just over 2.1 million bpd demand growth over two years.
At the same time, the EIA sees supplies from countries outside the Organisation of the Petroleum Exporting Countries growing by 1.11 million bpd in 2013 and by a further 1.77 million next year.
Further strengthening the global supply outlook, Sudan said on Tuesday it had received the first crude shipments from South Sudan since 2012.
In the near term, data from the American Petroleum Institute (API) showed US crude inventories rose 680,000 barrels for the week to May 3, falling short of a Reuters poll forecast of an average increase of 1.9 million barrels.
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