BLBG:Brent Oil Set for First Weekly Drop in Three on China Inflation
Oil fell in London, erasing a weekly gain, as concern that accelerating inflation in China will impede steps to stimulate growth countered a drop in crude production in Saudi Arabia.
Brent futures declined as much as 1.4 percent and headed for their first weekly decline in three weeks. China’s inflation climbed more than forecast to a seven-month high, potentially limiting scope for policy easing. Saudi Arabia, the world’s largest crude exporter, reduced output in December to the lowest in 19 months, according to a Persian Gulf official with knowledge of the kingdom’s energy policy.
“Today the market’s attention turns back to Chinese macro numbers,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who predicts Brent will struggle to advance to more than $113 a barrel.
Brent for February settlement on the London-based ICE Futures Europe exchange dropped as much as $1.53 to $110.36 a barrel and was at $110.54 at 11:16 a.m. local time. Prices are 0.7 percent lower this week. The European benchmark crude’s premium to West Texas Intermediate shrank to $17.48 a barrel earlier, the narrowest gap since Sept. 21.
WTI crude for February delivery was at $93.16 a barrel, down 66 cents, in electronic trading on the New York Mercantile Exchange. The contract increased 72 cents to $93.82 yesterday, the highest close since Sept. 18.
-- Editors: Rachel Graham, Raj Rajendran
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
