Oil prices dropped today as China’s exports tumbled unexpectedly in February, swinging the trade balance into deficit and raising concern among investors of a slowdown in the world’s second-largest economy.
Brent crude dropped by 55 cents to $108.45 a barrel, while US oil was down by 23 cents to $102.35, reported Reuters.
The fall in crude prices was contained by the ongoing geo-political situation in Ukraine and Libya.
China’s General Administration of Customs data revealed that exports in February fell 18.1% from a year earlier, following a 10.6% jump in January.
The combined exports in January and February fell 1.6% from the same period a year earlier, versus a 7.9% full-year rise in 2013.
Crude was under pressure even though China’s total crude oil imports increased in January and February, where traders saw the rise partly as a result of build-up in commercial crude inventories.
Import received support from the startup of two new Sichuan and Quanzhou refineries in the last month, with a combined production capacity of 440,000bpd.
But the market predicts that prices are set to rise as Gazprom issued a warning that it could stop shipping gas to Ukraine over unpaid bills, which led to reductions in supplies of Russian gas to Europe during a cold winter.
Image: An unexpected fall in China’s exports added to fears of a slowdown in the world’s second-largest economy. Photo: courtesy of Rawich.