Saturday, 1 March 2014 06:42
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LONDON(Reuters):Oil dropped below $109 a barrel on Friday as tension in Ukraine dampened risk appetite and the United States revised its estimate for fourth quarter growth below analyst expectations.
The U.S. Commerce Department said that gross domestic product expanded at a 2.4% annual rate, down sharply from the 3.2% pace reported last month and just shy of analyst expectations, according to a Reuters poll.
A severe winter in the United States supported oil prices earlier this year, helping oil avoid the weakness of other risk assets such as base metals, as have supply losses in Libya and South Sudan.
But growing concern about the demand outlook for the United States and China, the world’s largest and second-largest oil consumers, have weighed on prices. China’s yuan looked set for its biggest daily loss on record on Friday.
“Overall we’ve just seen a little bit of concern with what’s happening with global growth,” said Simon Wardell, oil analyst at Global Insight.
“Prices have also been brought up on pretty cold weather lately, particularly in the United States. So I think the prospect of moving into the spring months where we get refinery maintenance has a dampening influence on prices.”
Brent crude were down 34 cents to $108.62 a barrel by 1420 GMT, after dropping 56 cents in the previous session. U.S. oil was down 28 cents to $102.12.
The U.S. growth revision, released at 1330 GMT, pushed U.S. crude to a fresh intraday low of $101.80 before it narrowed losses.
