ET:Brent oil falls near $108 as US, China growth slows
SINGAPORE: Brent crude fell near $108 on Wednesday as data from the United States and China showed a slowdown in economic growth, stoking fears of weaker demand from the world's two largest oil users.
Data showed the United States economy grew slower than expected in the third quarter while Chinese factories battled with their weakest activity in 32 months in November. This offset earlier support for oil prices from fresh sanctions against Iran.
ICE Brent January crude fell $1.09 to $107.94 a barrel by 0357 GMT, up from an intraday low of $107.89.
US January crude was down $1.35 at an intraday low of $96.66 a barrel, after earlier slipping to a low of $96.50.
"The short-term reaction will be negative, but China will probably start monetary easing measures that will be positive for commodities in the medium term," ANZ analyst Natalie Robertson said.
Asian equities fell as a weak Chinese manufacturing survey renewed fears of a hard landing for the world's No. 2 economy, exacerbating worries about faltering global growth following a downward revision of US GDP data.
The HSBC flash manufacturing purchasing managers' index (PMI), the earliest indicator of China's industrial activity, slumped in November to 48, a low not seen since March 2009.
The US economy grew at a 2.0 per cent annual rate in the third quarter, down from the previously reported 2.5 per cent.
J.P. Morgan reduced its forecasts for Brent and West Texas Intermediate (WTI) for 2012 on rising supply and as policy failures in the United States and Europe, and signs of weaker growth in China, have darkened the outlook for commodities in the next six months.
"The headwind of economic and financial market risks is turning into a gale at the same time that Libyan production is ramping up," J.P. Morgan analysts led by Lawrence Eagles said in a note.
