26 January 2010 09:17 [Source: ICIS news]
SINGAPORE (ICIS news)--Crude futures fell more than $1/bbl on Tuesday amid demand worries and equity market falls, which were driven by fears that China could further tighten lending after it increased required reserve ratios for banks.
At 8:02 GMT, March Brent on London’s ICE futures was trading at $72.68/bbl, down $1.01/bbl from the previous close. Earlier, the North Sea benchmark hit a session low of $72.63/bbl, down $1.06/bbl.
At the same time, February NYMEX light sweet crude futures were trading at $74.21/bbl, down $1.05/bbl from the previous close. Earlier, the US benchmark contract fell to an intra-day low of $74.14/bbl, down $1.12/bbl.
The Chinese government move to raise domestic bank reserves on Tuesday came amid worries over an increase in credit and fears that the economy could be overheating. However, moves by China to tighten monetary policy also triggered concerns over the potential negative impact on growth and the global recovery.
A rise in the US dollar against the euro added further downward pressure on crude, making it less attractive to investors.
There was additional negative pressure on crude from initial forecasts that weekly US inventories will reveal a substantial build in crude and gasoline stocks, but a drawdown in distillate inventory levels.
Last week crude prices came under significant downward pressure after stock data from the Energy Information Administration (EIA) revealed a much larger than anticipated 3.9m bbl build in gasoline stocks.
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