London: Brent crude fell below $108 a barrel on Wednesday as investors weighed prospects for shrinking fuel demand in the world’s two biggest oil consumers.
US crude lost $1.43 to trade at $98.60 by 0930 GMT/son industry data that showed crude stocks in top oil burner the United States rose more than forecast, signalling a slowdown in demand as the weather improved.
More widely watched inventory figures are due later in the day from the US Energy Information Administration (EIA).
Economic uncertainty in No.2 oil user China is weighing across risk assets such as Asian shares, with industrial commodities, particularly copper and iron ore, the hardest hit.
Brent crude had lost 67 cents to $107.88 a barrel.
“The question in everybody’s mind is — what is the biggest risk to oil? And it is China slowing down,” said Jonathan Barratt, chief executive of commodity research firm Barratt’s Bulletin in Sydney.
“People have figured out that what happens in Ukraine doesn’t matter to oil markets so much. It may impact other commodities, but not so much oil.” Investors are awaiting fresh economic data from China on Thursday, including industrial output, retail sales and urban investment to get some clarity on where the economy is heading.
Clearer picture
By later on Wednesday, oil market participants will get a clearer picture of the oil demand outlook in the United States after the release of EIA data.
On Tuesday, figures from industry group the American Petroleum Institute (API) showed crude inventories rose by 2.6 million barrels in the week to March 7 to 367 million, compared with expectations for a gain of 2.2 million barrels.
Concerns that the unfolding crisis in Ukraine may worsen are meanwhile keeping oil’s losses in check.
Ukraine’s government appealed for Western help on Tuesday to stop Moscow annexing Crimea but the Black Sea peninsula, overrun by Russian troops, seemed fixed on a course that could formalise rule from Moscow within days.
Prices also drew some support from turmoil in Libya, where parliament voted Prime Minister Ali Zeidan out of office on Tuesday after rebels humiliated the government by loading crude on a tanker that fled from naval forces.
