Oil falls from two year highs on concerns of economic slowdown amid interest rate hike in China

28-Dec-10

Crude oil for February fell by over 50 cents to US$91 a barrel on the Nymex, while Brent crude rose very marginally to US$93.85 on the ICE Futures Europe exchange. The fall has come amid concerns that China’s second interest-rate increase in the past two months may slow economic growth. In a bid to curb inflation, the People’s Bank of China boosted benchmark one-year lending and deposit rates by 25 basis points on Christmas Day. Oil prices have been rising to record highs for the year on a colder than normal winter in NE USA, raising demand for heating fuels. US crude oil inventories dropped 5.33 mln barrels to 340.7 mln in the week ended Dec. 17, falling by 19 mln barrels this month.