By Ann Koh and Gavin Evans Jan. 26 (Bloomberg) -- Crude oil fell after South Korea, Asia’s fourth-biggest oil importer, said economic growth slowed and China’s stocks declined for a third day on concern the government will tighten credit growth. Oil erased yesterday’s 1 percent gain as South Korea’s economic growth eased in the three months through December to the slowest in three quarters as exports, consumer demand and government spending declined, the Bank of Korea said today. A report tomorrow will probably show U.S. refiners cut operating rates for a second week amid weak demand, according to a Bloomberg News survey of analysts. “China tightening its monetary policy is sending a signal,” said Clarence Chu, a Singapore-based trader with options dealers Hudson Capital Energy. “Demand is growing, but not as fast as previously expected.” Crude for March delivery fell as much as $1, or 1.3 percent, to $74.26 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $74.28 a barrel at 3:16 p.m. in Singapore. The contract climbed 72 cents to $75.26 yesterday, its first gain in four days. Futures have fallen 6.4 percent this year. Asian stocks fell for a seventh day, the longest losing streak in two years. The MSCI Asia Pacific Index dropped 1.3 percent to 119.93 as of 1:58 p.m. Tokyo time. The pace of lending growth in China slowed in the third week of January as compared with the first two weeks of the month, the Shanghai Securities News reported today, citing unidentified people. $80 ‘Unsustainable’ “We’re coming down from decade-highs for fuel and energy supplies, so $80 oil was just unsustainable,” said Tom Hartmann, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. “Even in the mid-seventies we’re going to have problems” given rising supplies and the risk of slower growth in Asia, he said. Crude’s direction from here is “sketchy,” Altavest’s Hartmann said. A decline through $74, near the March contract’s 200-day moving average, may trigger a slide that would take prices back to $63 by the second quarter, he said. “If we get some dollar weakness heading into this week maybe the market survives for a little bit longer, and kind of re-tests the $78-$79 level,” he said. “The bears kind of have the upper hand at this point.” U.S. Inventories A U.S. Energy Department report tomorrow will probably show crude-oil inventories rose last week as imports gained and refineries shut units, based on a Bloomberg survey of analysts. Stockpiles probably climbed 1.58 million barrels in the week ended Jan. 22 from 330.6 million the prior week, according to the median of 12 analyst estimates. Refining rates, already at their lowest outside the Atlantic hurricane season since at least 1989, probably fell 0.3 percentage point. Prices between $70 and $80 are “almost perfect” and provide sufficient returns for investment without harming the global economy, Saudi Arabia’s Oil Minister Ali al-Naimi said yesterday. Saudi Arabia is the biggest producer in the Organization of Petroleum Exporting Countries. The group, which sells about 40 percent of the world’s oil, is pumping about 1.77 million barrels a day more than output quotas set late 2008 to prevent a glut. Iraq isn’t restricted by quota. “OPEC are going to have real problems curbing their supply,” Altavest’s Hartmann said. “This price level isn’t killing or crimping the economy. But the supply eventually is going to kill this market.” Brent oil for March settlement fell as much as $1.02, or 1.4 percent, to $72.67 a barrel on the London-based ICE Futures Europe exchange. It was at $72.75 a barrel at 3:17 p.m. in Singapore. Yesterday, prices gained 86 cents, or 1.2 percent, to $73.69 a barrel. To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Gavin Evans in Wellington at gavinevans@bloomberg.net

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