Crude oil dropped the most in five weeks as China, the world’s second largest oil consuming country, raised bank reserve requirements to curb a credit boom and prevent the economy from overheating. Oil fell as much as 2.1 percent as China increased the proportion of deposits banks must set aside for the first time since 2008. China boosted oil purchases to a record last year, the government reported this week. Crude prices also fell amid forecasts a U.S. cold snap will abate this week. “This is a significant move on the part of the Chinese, and they’re the difference makers on whether the oil demand picture remains robust,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. “If they’re going to try to trim the sails, it’ll be tough for crude to even keep $80 a barrel.”
Crude oil for February delivery fell 76 cents, or 0.9 percent, to $81.76 a barrel at 10:02 a.m. on the New York Mercantile Exchange. Earlier, the contract touched $80.80 in the biggest daily decline since Dec. 9. Futures rose to $83.95 a barrel yesterday, the highest since Oct. 14, 2008, following the report that China’s crude imports reached a record 203.8 million metric tons last year, or 4.1 million barrels a day.
Today’s move will help remove about 300 billion yuan of liquidity from the Chinese economy, according to estimates by Xing Ziqiang, an economist in Beijing at China International Capital Corp., ranked the top China local brokerage by Asiamoney magazine last year.....Read the entire article.
Great video: Day Trading Made Simple
Share
No comments:
Post a Comment