Crude oil futures declined Friday along with U.S. stock markets after disappointing data out of China increased worries about the economy of the world's largest energy consumer.
Light, sweet crude for May delivery settled 81 cents, or 0.8%, lower at $102.83 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 10 cents to $121.81 a barrel.
China's economic growth fell to 8.1% last quarter, the lowest since 2009 and below economists' forecast of 8.3%. Leaders of the country, which is a major buyer of oil and other commodities, are trying to slow growth to a more sustainable level without causing a bigger economic slide that could spark fears about the global economy.
The data pushed down equities markets along with oil prices as investors considered whether demand for fuel products would be hurt by the China slowdown.
"This shows how jittery the market is. We've had quite a rally in risk assets, and people are standing really close to the door," said Sean McGillivray, vice president and broker at Great Pacific Wealth Management.
Dow Jones Industrial Average was recently down 0.5% at 12,917.
Crude futures have held in a tight range just above $100 a barrel for weeks. But despite signs of slowing fuel demand growth, worries about a supply shortage due to tensions between Iran and the West have kept prices from dipping lower.
On Thursday, the International Energy Agency said production from members of the Organization of Petroleum Exporting Countries outpaced demand during the first quarter. Oil stockpiles rose by as much as 1.2 million barrels a day during the first three months of the year, the IEA said, breaking "the cycle of repeatedly tightening fundamentals evident since 2009."
The IEA represents the world's developed energy-consuming nations.
Iran is set to meet with six world powers Saturday in Istanbul for talks focused on the country's nuclear program. A breakthrough in the talks could help reduce fears of a military conflict arising in the Persian Gulf region, which would likely lower oil prices. But investors remain wary of betting on declines until discussions begin.
Industry sources say the meeting will set the tone for oil markets in the coming weeks.
"The range is here. I don't expect the market to press any lower with the negotiations going on," said Rich Ilczyszyn, a broker at iiTrader in Chicago.
Front-month May reformulated gasoline blendstock, or RBOB, settled 1.06 cents, or 0.3%, lower at $3.3461 a gallon. May heating oil settled 0.83 cent higher at $3.1746 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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