March crude oil began with a sharply lower open and has broken down away from the mid-week high of $93.46. Some traders suggested that reports indicating that the Trans Alaska Pipeline could be back running at full capacity early next week served to ease supply concerns. It also seemed that added downside pressure came from this morning's action by the People's Bank of China to rein in inflation by hiking their Bank Reserve Requirement Ratio by 50 basis points. While Thursday's round of US economic data seemed to inject some concern over the pace of recovery in the US, December Producer Prices increased with the year over year rate running at 4.0%, and that seemed to fuel inflation threats. Meanwhile, this morning's weakness in crude oil prices comes in the face of a weaker US dollar and is probably the result of long liquidation selling and the looming expiration of February Brent crude oil.
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