BLBG: Oil Falls for First Day in 5 as China Seeks to Cool Expansion
By Margot Habiby
Feb. 12 (Bloomberg) -- Crude oil fell for the first day in five after China, the world’s second-largest oil-consuming country, sought to cool its economic expansion.
Oil dropped below $74 a barrel as the People’s Bank of China ordered banks to set aside more deposits as reserves for the second time in a month, boosting the dollar. An Energy Department report today may show U.S. crude supplies rose last week, according to analysts surveyed by Bloomberg News.
“This means it’s more difficult for the Chinese banks to lend, and China has been the bright spot in an otherwise unspectacular global economic recovery,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut.
Crude oil for March delivery fell $2, or 2.7 percent, to $73.28 a barrel at 9:32 a.m. on the New York Mercantile Exchange. Futures have dropped 7.7 percent this year.
China’s central bank said today it will raise banks’ reserve requirement ratio by 50 basis points. China’s policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year to drive a recovery from the first global recession since World War II.
The Energy Department’s weekly report, delayed by two days because of snowstorms, will probably show U.S. crude stockpiles climbed 1.6 million barrels in the week ended Feb. 5, based on the median estimate from 16 analysts in the Bloomberg News survey.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
