December 10, 2010 / 5:37 AM / 7 years ago

UPDATE 6-Oil slips on China rate hike worry, gasoline slide

 * China raises reserves requirements, curbs oil
 * China crude oil imports surge in Nov, supports oil
 * Coming up: OPEC ministers meet Saturday in Quito
 (Recasts, updates prices, market activity to settlement)
 By Robert Gibbons
 NEW YORK, Dec 10 (Reuters) - Oil prices fell on Friday in
choppy trading, finishing with a weekly loss as concerns that
China's moves to cool inflation will curb energy demand, while
slumping gasoline futures hit crude futures which had risen on
news of surging Chinese imports.
 For the third time in one month, China's central bank
increased the amount of money lenders must keep on reserve,
another move to rein in inflation. [ID:nTOE6B907U]
 U.S. gasoline futures RBc1 gave back most gains from the
previous session when news of Hovensa LCC's shut
gasoline-making unit at its St. Croix, U.S. Virgin Islands
refinery lifted prices.
 U.S. crude for January delivery CLc1 fell 58 cents to
settle at $87.79 a barrel, having seesawed between $87.10 and
an early $89.00 peak.
 Despite reaching a 26-month high of $90.76 on Tuesday, for
the week U.S. crude oil futures fell 1.57 percent. Oil rose
6.48 percent last week, its second straight weekly gain.
 In the week to Tuesday, money managers raised net long
crude oil positions on the New York Mercantile Exchange to a
record, the Commodity Futures Trading Commission said.
 That move above $90 just topped the $70-$90 a barrel price
range that Saudi Arabia and OPEC last month deemed acceptable
to consumers and came as OPEC prepared to meet on Saturday,
with oil ministers expected to retain existing supply targets.
 Total U.S. crude trading volume was tepid, 518,771 lots, 22
percent below the 30-day average.
 ICE Brent crude for January delivery LCOc1 fell 51 cents
to settle at $90.48 a barrel, slipping 1.03 percent for the
 "The market just continues to struggle in the high $80s,"
said Tom Bentz, broker at BNP Paribas Commodity Futures in New
 "The Chinese rise in November imports and exports is
supportive but being offset by the China central bank raising
reserves as well as the potential for an interest rate hike
over the weekend."
 China's crude oil imports jumped 22.1 percent last month
from a year earlier to 5.09 million barrels per day, the
fourth-highest monthly average on record. [ID:nTOE6B902F]
 The euro trimmed losses against the U.S. dollar, drawing
support from comments by European Central Bank President
Jean-Claude Trichet saying the euro zone recovery was on track.
 Earlier the dollar firmed against the euro as
better-than-expected U.S. economic data increased the allure of
the greenback, with gains expected to continue if Treasury
yields keep rising.
 U.S. Treasury prices fell, capping a week of relatively
aggressive selling spurred by rising growth outlooks and
deficit worries. [US/]
 U.S. stocks rose on upbeat data on consumer sentiment and
trade, while bulls were encouraged as the S&P 500 held above a
key technical level, the closely watched 61.8 percent
retracement of its drop from late 2007 to March 2009. [.N]
 OPEC and the International Energy Agency had different
demand outlooks for 2011 on Friday, as the IEA anticipated
robust demand while producer group OPEC said supply was
 The IEA, an adviser to 28 industrialized countries, in a
monthly report lifted its 2011 oil demand growth forecast by
130,000 barrels per day to 1.32 million bpd.
 OPEC forecast 2011 global oil demand growth would increase
to 1.18 million bpd, only 10,000 bpd more than predicted last
month and making the case for no change in supply policy when
oil ministers meet on Saturday in Quito. [ID:nLDE6B90JO]
 OPEC's secretary-general has said it wanted an improvement
in oil market fundamentals before increasing crude supplies,
even if prices go to $100 a barrel.
 In addition to mulling supply and market share policy, OPEC
ministers will be reacting to news that Saudi Arabia is
considering candidates to succeed long-standing oil minister
Ali al-Naimi in a ministerial reshuffle that could happen in
late February or early March next year. [ID:nN10104105]
 (Additional reporting by Edward McAllister and Janet McGurty
in New York, Una Galani in London and Alejandro Barbajosa in
Singapore; Editing by Dale Hudson and David Gregorio)

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