Oil prices dip below 75 dollars in Asian trade
Wednesday, 27 January 2010
SINGAPORE, Jan 26 (AFP): Oil prices dipped below 75 dollars a barrel in Asian trade Tuesday after overnight gains, amid concerns China would make further moves to tighten credit, analysts said.
New York's main futures contract, light sweet crude for delivery in March, fell 86 cents to 74.40 dollars a barrel.
London's Brent North Sea crude for March delivery dropped 80 cents to 72.89 dollars.
"The high reserve requirements for selected Chinese banks took effect Tuesday, so that raised concerns that China might further restrict bank lending." said Victor Shum, a senior principal with energy consultants Purvin and Gertz.
"That's what's driving the market below 75 dollars." he added.
Policymakers in China have taken steps to tighten credit lending in a bid to slow down its roaring economy, which grew a sizzling 10.7 per cent in the fourth quarter of last year but has also heightened inflation fears.
China is the world's second biggest oil consuming nation after the United States.
Other analysts said oil prices were also weighed down by the equities markets, which have been spooked by China's moves.
"There were no fundamental reasons for (prices) going down the last couple of days... The market is being driven strictly off currencies and the stock market." said independent analyst Ellis Eckland.
Crude lost 4.60 dollars over the Wednesday to Friday period last week as investors mulled abundant US petroleum inventories, China's moves to cool rapid economic growth and US President Barack Obama's plans to limit the banking sector.
New York's main futures contract, light sweet crude for delivery in March, fell 86 cents to 74.40 dollars a barrel.
London's Brent North Sea crude for March delivery dropped 80 cents to 72.89 dollars.
"The high reserve requirements for selected Chinese banks took effect Tuesday, so that raised concerns that China might further restrict bank lending." said Victor Shum, a senior principal with energy consultants Purvin and Gertz.
"That's what's driving the market below 75 dollars." he added.
Policymakers in China have taken steps to tighten credit lending in a bid to slow down its roaring economy, which grew a sizzling 10.7 per cent in the fourth quarter of last year but has also heightened inflation fears.
China is the world's second biggest oil consuming nation after the United States.
Other analysts said oil prices were also weighed down by the equities markets, which have been spooked by China's moves.
"There were no fundamental reasons for (prices) going down the last couple of days... The market is being driven strictly off currencies and the stock market." said independent analyst Ellis Eckland.
Crude lost 4.60 dollars over the Wednesday to Friday period last week as investors mulled abundant US petroleum inventories, China's moves to cool rapid economic growth and US President Barack Obama's plans to limit the banking sector.