Brent crude oil slipped to a one week low at $102.57 at 5:22 GMT on Friday morning. The commodity suffered as investors worried about a weakening Chinese economy and the US Federal Reserve's plan to taper off its stimulus program.
After climbing steadily on a weak US dollar, Brent prices began to tumble on Wednesday afternoon following Fed Chairman Ben Bernanke's press conference. In his speech, Bernanke indicated that the Bank was planning to roll back its $85 billion per month stimulus plan at the end of the year if the US economy continued to improve.
At a time when the market should be picking up due to the US' driving season, CNBC reported that US crude inventories have been increasing. Analysts had expected to see a 500,000 barrel drop, but instead figures showed that US crude stocks increased by more than 300,000 barrels.
Chinese data also put pressure on the commodity after the nation's factory activity slipped to a nine month low. Although the nation has been plagued with weak data and an increasingly difficult global economy, the China's central bank has held off on adding cash to the market.
Brent found some support from geopolitical tension in the Middle East that is threatening to create supply interruptions. The Syrian civil war is quickly growing into a larger issue as the US and Russia face off over which side of the conflict to support. At a G8 summit, several world leaders encouraged Russia to ease its support of Syrian President Bashar al-Assad, but no compromise has been reached.
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