* China’s imports grew 5.3 percent in March, exports grew
8.9 percent
* U.S. crude inventories seen rising further due to imports
* Brent to end rebound below $123.54 -technicals
* Coming Up: U.S. API weekly crude stocks; 2030 GMT
(Adds details on China’s trade, comments, updates prices)
By Manash Goswami
SINGAPORE, April 10 (Reuters) – Brent crude futures slipped
towards $122 on Tuesday as a steeper than expected fall in
China’s overall imports in March raised concerns about oil
demand growth in the world’s second-biggest consumer.
Investors are watching for signs that China can avoid a hard
landing as it tweaks monetary and fiscal policies to cut rising
costs and help small businesses hit by a global downturn.
Overall imports grew 5.3 percent, lagging expectations for
growth of 9 percent.
Front-month Brent crude slipped 30 cents to $122.37
a barrel by 0358 GMT, after settling 76 cents lower. The
contract slipped as low as $121.02 on Monday, the lowest since
March 15. U.S. oil was unchanged at $102.46, after
settling 85 cents lower.
“There have been some doubts about global oil demand growth
creeping in to the market, and China’s crude oil import numbers
won’t help change that perception very much,” said Ric Spooner,
chief market analyst at CMC Markets. “They are broadly in line
with expectations.”
China’s exports grew 8.9 percent compared with a consensus
call for 7.2 percent. The two numbers left the overall trade
balance in surplus, reversing February’s $31.5 billion run of
red ink on the balance of payments and confounding market
expectations for a $1.3 billion deficit.
“An important point of the trade numbers is the softer
overall import figure,” Spooner said. “That raises a question on
the country’s domestic activity and investment programme and if
economic activity has been softer than anticipated.”
Even so, China’s March imports of crude oil rose 8.7 percent
on the year to 5.55 million barrels per day (bpd), off the
previous month’s record, but still at their third highest ever,
data showed, as refiners built stocks while scaling back
operations.
The European benchmark may trade between $120 and $125 a
barrel and U.S. crude in a $100-$105 range as participants await
details of China’s gross domestic product, industrial output and
U.S. consumer prices due later this week to gauge the demand
growth outlook in the world’s two top economies, said Ben Le
Brun, a market analyst at OptionsXpress in Sydney.
“Prices have fallen very close to their support levels and
the series of data due this week from China and elsewhere will
pave the direction,” he said.
China is expected to report first-quarter growth of 8.3
percent on the year, according to a Reuters poll. That would
compare with growth of 8.9 percent in the last quarter of 2011
and be the slowest in nearly three years, but still comfortably
above China’s target of 7.5 percent growth this year.
Oil futures are also under pressure on expectations of a
further increase in U.S. commercial crude inventories, building
on the biggest two-week increase in more than a decade, as
higher imports easily outpaced sluggish refinery demand.
Industry group American Petroleum Institute (API) is due to
release its numbers later in the day.
Brent is expected to end its current rebound below the April
5 high of $123.54 per barrel and revisit Monday’s low of
$121.02, while U.S. oil may edge up to $103.40 per barrel, an
hourly chart high touched on April 5, according to Reuters
technical analyst Wang Tao.
(Editing by Clarence Fernandez)
