BLBG: Oil Trades Near $74 on China Economic Tightening, Saudi Concern
By Robert Tuttle
Feb. 15 (Bloomberg) -- Oil traded near $74 a barrel after China sought to temper its economic expansion and a Saudi adviser said the U.S. aims to cut oil imports.
China ordered banks to set aside more deposits as reserves for the second time in a month on Feb. 12, signaling slower economic growth and reduced energy demand. Saudi oil ministry adviser Mohammad al-Sabban said the U.S. is promoting nuclear power as a means of cutting oil imports.
“The market is a bit uneasy about the Chinese tightening,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. China is not “yet the largest importer; it’s not yet the largest consumer region. Still it is one of the most important ones.”
Crude oil for March delivery traded at $74 a barrel, down 13 cents, in electronic trading on the New York Mercantile Exchange at 8:55 a.m. London time. The contract fell $1.15, or 1.5 percent, to settle at $74.13 on Feb. 12, the first decline in five days.
The People’s Bank of China said 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.
Sabban said at a conference in Jeddah, Saudi Arabia, today that the U.S. seeks to cut oil imports by 1.4 million barrels a day, about the same amount that the U.S. currently brings in from Saudi Arabia.
Dollar Gains
Markets in China, Taiwan, Hong Kong, Singapore and Malaysia are closed today for the Lunar New Year holiday. U.S. markets are shut today for Presidents’ Day.
The dollar advanced to $1.3605 against the euro as of 8:50 a.m. London time from $1.3632. A stronger dollar curbs demand for commodities as an alternative investment.
U.S. Secretary of State Hillary Clinton, shoring up support in the Middle East for a hard line against Iran, said “evidence is accumulating” of that nation’s intention to produce nuclear weapons. Clinton spoke last night at the U.S.-Islamic World Forum in Doha, Qatar.
Brent crude for April delivery fell 20 cents to $72.70 a barrel as of 8:38 a.m. on the ICE Futures Europe exchange in London.
To contact the reporter on this story: Robert Tuttle in Doha at rtuttle@bloomberg.net
