BLBG:Oil Drops From Three-Day High as Chinese Demand Declines
Oil fell from the highest price in three days in New York after Chinese oil demand declined to the lowest level in five months.
Futures slid as much as 0.7 percent, after gaining 0.2 percent last week. China’s apparent oil demand, or domestic production minus net imports, slid to 9.51 million barrels a day in March, the lowest level since October, according to Bloomberg calculations from Chinese customs data released today. A separate report indicated Chinese manufacturing may shrink for a sixth month. The nation is the second-biggest oil consumer, after the U.S.
“Negative data from China is contributing to oil’s weakness today,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who correctly predicted Brent’s advance to $120 a barrel earlier this year. “Brent has slipped into a lower range, with the bottom around last week’s low at $116.70, and resistance at $120.50.”
Crude for June delivery fell as much as 74 cents to $103.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.26 at 3:53 p.m. Singapore time. The contract climbed 1.1 percent to $103.88 on April 20, the highest close since April 17. Front-month prices have advanced 4.5 percent this year.
Brent oil for June settlement on the London-based ICE Futures Europe exchange was down 46 cents, or 0.4 percent, at $118.30 a barrel. The European benchmark contract was at a premium of $15.04 to New York futures, compared with $14.88 on April 20.
A preliminary reading of a purchasing managers index for China by HSBC Holdings Plc and Markit Economics came in at 49.1 for April, compared with a final 48.3 in March. A number below 50 points to a contraction. China accounted for 11 percent of the world’s oil consumption in 2010, according to BP Plc (BP/)’s Statistical Review of World Energy. The U.S. accounted for 21 percent.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Mike Anderson at manderson34@bloomberg.net
