Brent fell below
$58 a barrel on Tuesday after China's consumer inflation came in at a
five-year low for January, raising worries about oil demand in the
world's second-largest economy.
The International
Energy Agency (IEA) also said the United States will remain the world's
top source of oil supply growth up to 2020, defying expectations of a
dramatic slowdown in shale output and keeping fears of a continuing glut
at the forefront.
Brent crude slipped 64 cents to $57.70 by 0730 GMT (2:30 a.m. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.
U.S. crude futures dropped to $52.23, down 63 cents.
"The drive down today would most probably be due to weak China CPI figures which turned out to be lower than expectations," said Daniel Ang of Singapore-based Phillip Futures in the Reuters Global Oil Forum, referring to monthly consumer price index data released on Tuesday.
China's January inflation hit a five-year low, with the CPI rising just 0.8 percent from a year before, adding pressure on policymakers to inject more stimulus to underpin growth.
Oil
prices received a boost on Monday after a monthly report by the
Organization of Petroleum Exporting Countries (OPEC) raised the forecast
for 2015 demand for its oil to 29.2 million barrels per day (bpd), up
430,000 bpd from an earlier forecast.
The IEA report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, but said U.S. shale oil output growth would only pause amid the current price collapse before regaining momentum.
U.S. crude fell, also snapping three days of gains, after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.
"Another report of strong builds in inventories in this week's EIA market report could halt oil's rally," ANZ bank said on Monday, referring to the U.S. Energy Information Administration's stockpiles data release due on Wednesday.
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| The International Energy Agency (IEA) |
Brent crude slipped 64 cents to $57.70 by 0730 GMT (2:30 a.m. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.
"The drive down today would most probably be due to weak China CPI figures which turned out to be lower than expectations," said Daniel Ang of Singapore-based Phillip Futures in the Reuters Global Oil Forum, referring to monthly consumer price index data released on Tuesday.
China's January inflation hit a five-year low, with the CPI rising just 0.8 percent from a year before, adding pressure on policymakers to inject more stimulus to underpin growth.
The IEA report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, but said U.S. shale oil output growth would only pause amid the current price collapse before regaining momentum.
U.S. crude fell, also snapping three days of gains, after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.
"Another report of strong builds in inventories in this week's EIA market report could halt oil's rally," ANZ bank said on Monday, referring to the U.S. Energy Information Administration's stockpiles data release due on Wednesday.
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