Brent Slips On Strong Dollar

on June 24 2013 2:12 PM

Brent crude oil slipped on Thursday morning after weak Chinese data pointed to weakening global demand. The commodity traded at $104.55 at 7:08 GMT Thursday morning.

According to CNBC, the Chinese economy grew at its slowest rate in 13 years in 2012 and has shown little sign of improvement so far in 2013. It's cause for concern among investors, as the lackluster data suggests only a tepid recovery for the world's second-largest oil consumer. The latest Chinese PMI data showed the nation's factory activity fell to a nine-month low in June, which could mean oil demand will fall as well.

The PMI data has fueled concern that China may miss its 7.5 percent growth target for the second quarter and and post a sharp decline. Also weighing on Brent prices was a stronger dollar, which found support from Federal Reserve Chairman Ben Bernanke's press conference following the U.S. Federal Reserve meeting. Bernanke confirmed what most investors had anticipated: that the Fed is planning to taper its $85 billion per month bond buying plan toward the end of the year if the nation's economic data strengthened. The bank is aiming to end the program in mid-2014. Rising inventories in the U.S. despite the summer peak driving season, a time when stocks are normally depleted, put pressure on crude prices as well. Although analysts had forecast a 500,000-barrel decrease in U.S. stockpiles for the week ending June 14, data showed the nation's oil inventories rose by more than 300,000 barrels.

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