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Oil slips to near $91 after China tightening move

Oil slips to near $91 after China tightening move

January 17th, 2011 in News

BANGKOK (AP) - Oil prices skidded to near $91 a barrel Monday in Asia as the dollar gained against the euro and after China's latest move to restrict lending raised the prospect of weaker demand for crude.

Benchmark oil for February delivery was down 51 cents at $91.03 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 14 cents to settle at $91.54 a barrel on Friday.

The euro fell to $1.3271 from $1.3385 late Friday making crude, which is bought and sold in dollars, more expensive for investors holding the European common currency.

China, the world's biggest energy consumer, on late Friday raised the amount of money banks must keep on reserve for the seventh time in a year - its latest move to curb lending and tame inflation.

That suggested China's economic growth could slow further, denting demand for imported oil, which is trading near a two-year high, and other fuels.

Demand in the U.S. is also weaker at this time of year as New Year holidays are over and Americans are driving less. But any positive economic news from the U.S., the world's No. 1 economy, could lift oil to near $93 a barrel, energy consulting firm Cameron Hanover said in a report.

In other Nymex trading in February contracts, heating oil fell 1.5 cents to $2.63 a gallon and gasoline dropped 0.8 cent to $2.487 a gallon. Natural gas futures lost 1.1 cent to $4.48 per 1,000 cubic feet.

Brent crude was down 42 cents to $97.96 a barrel on the ICE Futures exchange in London.