Brent falls below $120 on China data, Euro zone worries

Mon Apr 16, 2012 3:45pm EDT
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By Jessica Jaganathan

SINGAPORE (Reuters) - Brent crude fell below $120 on Monday as growing worries about the global economy from Europe to China, the world's No. 2 oil consumer, reinforced concerns about slowing demand for petroleum.

But the slide in crude prices was stemmed by lingering concerns that western sanctions could further disrupt Iranian oil exports.

Front-month Brent crude slipped $1.28 to $119.93 a barrel by 0731 GMT, after settling at $121.21 a barrel on Friday. U.S. oil slipped 79 cents to $102.05 a barrel after settling at $102.83.

"The weaker-than-expected Chinese data appears to be the key driver of the market right now," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments.

Data showed that China's economy grew at the slowest pace in nearly three years in the first quarter, raising fears that the downward drift will extend into the second quarter and dampen oil demand.

China's implied oil demand rose moderately in March over a year earlier, but stood at a five-month low on a daily basis, as refineries scaled back runs to the lowest level since October on maintenance and poor refining margins.

A stronger dollar and a jump in the cost of insuring Spanish debt against default to a record high on Friday also renewed worries about the eurozone debt crisis.

A U.S. survey showed consumer sentiment had slipped in early April as higher gasoline prices hit household budgets.   Continued...

Gas prices are shown at a gas station in Beverly Hills, California May 20, 2008. REUTERS/Lucy Nicholson