Brent drops from 3-month high
Singapore, January 11, 2013
Brent crude futures fell further below $112 a barrel on Friday on concerns that faster-than-expected inflation in China will limit room for further policy easing to boost growth in the world's second-biggest oil consumer.
Still, production cuts in top oil exporter Saudi Arabia, which pushed Brent prices to their highest in nearly three months in the previous session, kept losses in check.
China's annual consumer inflation Rate accelerated to a seven-month high of 2.5 percent in December, triggering profit-taking in oil and stocks.
"China's inflation was hotter than expected which might add a little bit of downside risk and some investors may be cashing in profits," said Ben Le Brun, market analyst at OptionsXpress.
Front-month Brent futures shed 33 cents to $111.56 per barrel by 0521 GMT, but were on track for their third weekly gain. US crude rose 8 cents to $93.90 per barrel, poised for their fifth weekly increase.
Oil prices gained support this week from better-than-expected trade numbers from China, relief after the short-term resolution of the US fiscal crisis and data showing a sharp drop in US crude imports in the last week of 2012.
But the gains in both contracts were smaller than in previous weeks, suggesting underlying concerns. US crude gained less than 1 percent while Brent added less than 0.5 percent.
Traders said investors this quarter will focus on further talks between US lawmakers to resolve the debt crisis as well as seeking cues on the global economy amid expectations that world growth in 2013 may be higher than 2012. - Reuters