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Brent slips below $101 as China GDP growth hits 3-yr low

China's refinery throughput fell for the third straight month in June as its economic growth slowed

Reuters  |  Singapore 

slipped below $101 a barrel on Friday as China grew at its slowest pace in three years, reinforcing fears that a global economic slowdown could hurt fuel demand.

China, the world's top energy consumer, grew at 7.6 percent in the second quarter from a year ago, its slowest pace since 2009, as it faces stiffening headwinds of economic uncertainty in its two biggest foreign markets -- the European Union and the United States.

Brent was down 37 cents at $100.70 a barrel by 0302 GMT. U.S. crude was at $85.87, down 21 cents.

"The market, at the moment, seems quite happy that the Chinese data weren't drastically lower," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

"Weaker expectations have already been factored into the market," he said, adding that investors will look ahead to more data out of the United States and Europe to take a pulse on global economic health.

China's refinery throughput fell for the third straight month in June as its economic growth slowed. The country was expected to account for nearly half of the world's oil demand, according to the Energy Agency.

Analysts are hopeful that China's growth will pick up in the third quarter as Beijing further loosens monetary policy and fast-forwards infrastructure spending, boosting its demand for commodities.

Oil up on supply risks

Brent is set to post a third straight week of gains by the end of Friday after suffering in the second quarter its largest three-month loss since the 2008 financial crisis.

Oil rose after the euro zone debt resolution last month and as jitters over supply from Iran and the North Sea increased appetite among investors for riskier assets.

The United States ramped up pressure on Iran's ability to export oil on Thursday, identifying Tehran's main tanker firm and exposing dozens of its vessels as government-controlled entities. The measures aim at depriving Iran of oil revenue to pressure it to rein in its nuclear program, which Tehran maintains is solely for peaceful purposes.

Production upsets in the North Sea and a potential record-low export volume in August also supported Brent.

Britain's largest oilfield, Buzzard, suffered a glitch, causing its output to fall to as low as 50,000 barrels per day, or a quarter of its normal rate, earlier this week, traders said. It was unclear if production had returned to normal.

Forecasts of lower fuel demand growth in 2012-2013 due to a capped

The Energy Agency said on Wednesday the global economic slowdown could put a lid on oil prices, but "nasty supply surprises" could reignite a market rally.

First Published: Fri, July 13 2012. 09:42 IST