Oil steady above $74; Japan growth eases demand concern

Oil steady above $74; Japan growth eases demand concern

Sinapore: US crude was steady above $74 on Monday after stronger-than-expected Japanese growth data eased concerns that energy demand would taper off as China tightens monetary policy.

Crude fell for the first time in four days on Friday, touching an intra-day low of $72.66, after China’s central bank increased the percentage of cash banks must keep as reserves, the second such increase this year.

US crude for March delivery rose 14 cents to $74.27 a barrel at 0326 GMT. London ICE Brent for April climbed 25 cents to $73.15.

“When you look at prices I don’t see much more downside," said Mark Pervan, senior commodities analyst at ANZ in Melbourne.

“China, Japan, Korea, Taiwan and other Asian economies are going to perform very well this year notwithstanding what the Chinese government is doing to control growth."

Japan’s economy expanded at the fastest pace in two quarters, and more than expected, in October-December as an export recovery spurred capital spending.

Asia, US holidays

Holidays around the world are set to curb liquidity in oil markets on Monday.

China’s markets are closed this week for the Lunar New Year holiday, as are markets in Taiwan, Hong Kong, Vietnam, Malaysia and Singapore. In the United States markets are closed for Presidents’ Day.

European markets are still open, and it is action there on debt-laden Greece that could set the tone for the euro and US dollar.

The euro was near nine-month lows against the dollar on Monday as doubts intensified about whether policymakers in the euro zone will help Greece, prompting investors to add to long positions in the greenback.

Euro zone finance ministers, scheduled to meet Monday and Tuesday, are expected to call on Greece to fully implement planned budget deficit cuts so that the euro area would never have to deliver on its pledge last week of support for Athens.

Demand for distillates in the US, a fuel category that includes heating oil and diesel, was down 8% in the four weeks to 5 February from a year earlier, government data showed on Friday.

The nation’s crude oil and gasoline inventories rose more than forecast in the first week of February, while distillates fell much less than expected.