Oil falls to near $103 after China growth slows
SINGAPORE (AP) — Oil prices fell to near $103 a barrel Friday in Asia after economic growth slowed in China, the world's second-largest crude consumer.
Benchmark oil for May delivery was down 49 cents to $103.15 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 94 cents to settle at $103.64 in New York on Thursday.
Brent crude for May delivery was down 34 cents at $121.18 per barrel in London.
China said Friday its economy grew by 8.1 percent in the three months ending in March, its weakest expansion since the second quarter of 2009. It grew 8.9 percent in the last quarter of 2011.
Developing economies, led by China, have accounted for most of the increase in global crude demand in recent years as the U.S. and Europe struggled with weak economies. China's breakneck economic growth, which averaged about 10 percent a year during the past decade, helped push oil prices up from $10 in 1998.
Some analysts expect Chinese growth to bottom this quarter before a strengthening global economy helps boost crude prices in the second half.
"With Chinese data somewhat patchy, U.S. employment growth slowing, Europe still in the midst of a protracted recession, it's tempting to focus on the short-term downside risks," J.P. Morgan said in a report. "The reality is that any short-term weakness in energy prices is likely to prove limited."
Investors will also be closely watching meetings between Iran and the U.S., France, Britain, Russia, China and Germany that begin Saturday in Turkey. The negotiations are a bid to avoid a military strike by Israel or the U.S. against Iran's nuclear facilities that could disrupt global crude supplies, but analysts expect the talks will likely be drawn out over several months.
"Any conciliatory gestures on Iran's part will force a magnified downward price reaction, but we don't expect major developments to come out of the weekend meetings," energy trader and consultant Ritterbusch and Associates said in a report.
In other energy trading, heating oil was down 0.7 cent at $3.16 per gallon and gasoline futures slid 0.2 cent at $3.35 per gallon. Natural gas fell 0.1 cent at $1.98 per 1,000 cubic feet.