Crude Slides to 2013 Low After Weak Chinese GDP Data
U.S. oil futures plunged to their lowest level all year, while the European benchmark neared $100 a barrel, after a disappointing reading on Chinese economic growth raised concerns over oil demand in the world's second-biggest consumer.
Light, sweet crude for May delivery settled $2.58 lower, or 2.8%, at $88.71 a barrel on the New York Mercantile Exchange, marking the contract's lowest finish since Dec. 24.
May Brent crude on the ICE futures exchange settled $2.72 lower, or 2.6%, to $100.39 a barrel, expiring at the close of trading. That's the lowest settle for a front-month contract since July 11.
The Chinese government said its growth domestic product grew 7.7% in the first quarter, a decline from 7.9% in the fourth quarter of 2012 and lower than many economists forecast. The median GDP forecast of 14 analysts polled by The Wall Street Journal was for growth of 8%.
The headlines triggered losses early in the session that accelerated as the day went on. Monday's loss marked the third straight session of lower oil prices, as worries about a slowdown in global demand weigh on the market.
"These things just keep adding up to put pressure on commodities," said John Kilduff, founding partner at Again Capital in New York.
The disappointing reading has raised worries about slowing oil demand in China, whose booming growth helped fuel oil's steady rise over much of the last decade. China and other emerging markets have been key engines of global oil demand as developed countries, including the U.S., have suffered from flagging economic growth and higher fuel efficiency.
Nymex crude futures are down 3.3% since the start of the year, while Brent crude has shed 9.6% over the same period.
Monday's retreat coincided with a broader selloff in commodities, with gold prices plunging more than 9% to a two-year low and equities sliding.
A number of prominent analysts and industry groups have downgraded their view on global demand recently, with the Organization of the Petroleum Exporting Countries, the Energy Information Administration and the International Energy Agency all cutting their views in the last week.
Analysts at Morgan Stanley said Brent's selloff may be exacerbated by the expiration of the May contract, "as paper traders may struggle to find buyers to unwind positions." Analysts at Goldman Sachs on Monday closed an eight-month Brent crude trading recommendation following the recent losses.
Front-month May reformulated gasoline blendstock, or RBOB, settled 4.42 cents, or 1.6%, lower at $2.7576 a gallon.
May heating oil settled 4.26 cents, or 1.5%, lower at $2.8292 a gallon.
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