Forex Pros – Crude oil futures edged lower on Wednesday, pulling back from a four-day high after stronger-than-expected inflation data from China fuelled concerns the country would step up its monetary tightening policy.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD103.58 a barrel during European morning trade, easing down 0.11%.
It earlier fell by as much as 0.4% to a daily low of USD103.23 a barrel.
Earlier in the day, official data showed that China’s annual rate of inflation in April rose 5.3%, down slightly from 5.4% in March, but still surpassing expectations for a 5.2% increase.
The gain was above the government’s 4% full-year target for a fourth straight month, keeping the door open for more tightening steps by Beijing that could slow demand.
Trade data released on Tuesday showed that China’s imports of crude oil expanded 1.7% in April from a year earlier, down significantly from an 11.9% advance in the first quarter.
China is the world’s second largest crude oil consumer, with the International Energy Agency forecasting that China will account for approximately 40% of global oil demand growth in 2011.
Meanwhile, industry data released by the American Petroleum Institute on Tuesday showed that U.S. crude inventories rose by 2.95 million barrels last week, the sixth consecutive weekly buildup.
The U.S. Energy Department was to release its closely-watched crude oil inventories report for the week ended May 6 later in the day. The data was expected to show that U.S. crude oil stockpiles increased by 1.1 million barrels, after jumping by 3.4 million barrels in the preceding week.
Despite the pullback, crude prices were expected to remain supported amid mounting concerns that flooding along the Mississippi River will hurt U.S. refinery operations and disrupt fuel supplies.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery edged 0.14% to trade at USD117.06 a barrel, up USD13.48 on its U.S. counterpart.
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