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Brent prices remained steady today over fresh worries about demand growth in China and the US, while oil markets came under pressure due to strengthening dollar.

Brent crude was steady at $108.51 a barrel, before rising to $108.83, while US oil dropped by 21 cents to $92.31, reported Reuters.

A statement by People’s Bank of China (PBOC) Governor Zhou Xiaochuan on stabilising inflation expectations has once again increased investor apprehensions that the bank may drop its pro-growth policy ahead of economic expansion.

On Wednesday, Energy Information Administration (EIA) data showed that prices, mainly for the US contract, came under pressure, as crude inventories in the world’s largest oil consumer jumped last week.

The EIA data further showed that crude inventories increased by 2.62 million barrels in the week to 8 March, up against analysts’ forecasts of a 2.3 million barrel rise. The growth was mainly driven by an increase in crude imports by 227,000 barrels per day (bpd) to 7.49 million bpd.

"The US dollar was close to a seven-month high against other currencies, adding to pressure on oil markets."

The agency’s data also showed that refinery utilisation dropped by 1.2 percentage points to 81% of total capacity, compared with predictions of a rise of 0.2% points.

The IEA, which remained bearish on oil demand for 2013, has reduced its outlook for demand growth by 20,000 bpd to 820,000 bpd.

On Thursday, the US dollar was close to a seven-month high against other currencies, adding to pressure on oil markets.

The dollar index was at 82.845, after rising at 83.055 on Wednesday, as US retail sales increased at their fastest rate in five months in February. A stronger dollar is expected to make oil more expensive for holders of other currencies.

Prices also came under pressure after US President Barack Obama put pressure on his critics in Washington – House of Representatives Republicans – to agree to his demand for tax increases, as part of a deficit-reduction deal.

Image: HQ of the People’s Bank of China Beijing. Photo courtesy of Yongxinge.