Oil falls as China inflation picks up

Friday 11 January 2013 14.14
Oil prices down after Chinese inflation news
Oil prices down after Chinese inflation news

Oil prices fell back to near $93 a barrel today after a rise in China's inflation that if sustained could limit measures to support growth.

Benchmark oil for February delivery was down 75 cents to $93.07 a barrel in electronic trading on the New York Mercantile Exchange.

The contract rose 72 cents to finish at $93.82 a barrel in New York last night.

Traders attributed the gain to a rebound in China's trade growth, which suggests a possible recovery in global demand.

Brent crude, used to price international varieties of oil, was down $1.36 to $110.53 a barrel on the ICE Futures exchange in London.

New data showed China's export growth in December more than quadrupled from the previous month's level to 14%. Imports rose 6%, after failing to grow at all in November, in a sign of increasing domestic demand. It was tempered, however, by data today that showed China's inflation spiked to a six-month high in December.

Consumer prices rose 2.5% over a year earlier, the National Bureau of Statistics said, driven by a 14.8% jump in vegetable prices after a severe winter hurt harvests. Higher inflation could hamper Beijing's ability to support China's recovery.

Analysts said reports that Saudi Arabia produced 9 million barrels of crude oil in December, 500,000 barrels less than the previous month, prevented prices from falling further. Official figures will be released next week in OPEC's monthly oil market report.

Keywords: oil, brent