US Crude Falls On China Slowdown, Equities Market Tumble
NEW YORK, Jan 24 (Reuters) - U.S. crude settled lower on Friday on reports of a slowing economy in China and a downward slide in U.S. equities, while Brent saw slight gains on spread trading.
China's economic growth is expected to slow gradually over the next two years as the government forges ahead with structural reforms and seeks to curb elevated debt levels, a Reuters poll showed.
China's economic woes and political problems in Turkey, Argentina and Ukraine drove U.S. stock markets down, with the S&P 500 on track to post its worst drop in more over two months.
Also weighing on oil prices were expectations that the U.S. Federal Reserve will further trim its market-friendly stimulus measures when it concludes a two-day meeting on Wednesday.
Oil products rose sharply on bitter cold in the United States that sapped stockpiles of crude and distillates there and drew heating oil imports from Europe, Russia and Asia.
"The over-arching issue is the emerging market turmoil," said Bill O'Grady, executive vice president and chief market strategist for Confluence Investment Management in St. Louis, Missouri. "Contagion is a pretty significant risk."
Brent crude rebounded from a drop of more than $1.20 to settle 30 cents higher at $107.88,its biggest weekly gain since Dec. 20.
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