Brent futures dropped today due to sluggish Chinese economic growth, which dampened energy use in the world’s second largest economy and oil consumer.
Brent crude fell by seven cents to $109.29 a barrel, while US oil was up by 16 cents to settle at $103.91, reported Reuters.
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The geopolitical risks in Ukraine were sidetracked by slower economic growth in China and a gradual resumption of Libyan oil exports.
China’s economy grew by 7.4% in the first quarter of 2014, slowing from a 7.7% increase in the last quarter of 2013, causing a slowdown in Brent prices.
The slowing Chinese economy has affected oil demand, which dropped by 0.6% to 9.96 million barrels per day in the first quarter, forcing refiners to scale back crude runs and raise exports to trim high fuel stocks.
The drop in Brent was also supported by the news that the Libyan National Oil Corp (NOC) is set to export its first cargo from the reopened Hariga port this week.
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By GlobalDataNOC said that Zueitina, another port that was due to reopen, was still not under government control.
Crude prices are also set to drop further as the American Petroleum Institute data reveals that US crude inventories rose by 7.6 million barrels in the week ending 11 April.
Oil traders are waiting for the US Energy Information Administration’s weekly oil inventory data, which is due to be released later today.
Image: China’s slowing economic growth has some effect on oil demand. Photo: courtesy of Victor Habbick.
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