Crude dips as Chinese inflation reaches 16-month high

Crude oil dipped below $82 a barrel yesterday as the markets digested a rise in Chinese inflation.

Official data revealed Chinese consumer prices reached a 16-month high last month - the fourth straight monthly rise.

The National Bureau of Statistics said consumer price inflation rose to 2.7% in February compared with a year earlier and up from 1.5% in January.

According to John Kilduff, partner at Round Earth Capital in New York: “Crude prices are struggling on concerns about the coming moves by China to manage its economic output. The inflation reading there appears to be above their comfort level, and moves to tame the economy will likely impact energy demand.”

US crude for April lost 22 cents to $81.87 a barrel after reaching $83.03 on Wednesday - the highest level since the 15-month high of $83.95 seen in early January.

Meanwhile, Brent North Sea crude fell 33 cents to $80.15 a barrel.

China’s thriving economy has seen oil imports surge and earlier this week, OPEC said Chinese daily oil demand has soared by nearly 2 million barrels in five years to hover around the 8.6 million barrels per day mark.