Oil Sheds Gains After Weak Chinese Data

By Dow Jones Business News, March 10, 2014, 05:25:00 AM EDT

--Surprise drop in Chinese exports may signal declining demand

--Concerns about Ukraine and Libya seen supporting prices

--Reduction of Cushing, Okla., glut expected to persist

NEW YORK--Crude-oil futures fell Monday as China posted a bigger drop in exports than expected, a potential bearish sign for demand.

Light, sweet crude for April delivery was down $1.54, or 1.5%, to $101.04 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe was down $1.11, or 1%, at $107.89 a barrel.

China over the weekend said exports fell 18% compared with a year before, the first year-over-year drop since September. Some analysts cautioned that distortions related to the Lunar New Year holiday may account for a big part of the decline, but, as Energy Management Institute analyst Dominick Chirichella wrote, the disappointing export data coincided with a drop in oil imports into China for February.

"The data out of China have been consistently suggesting that China may not meet its growth objectives this year even though the leadership just projected a 7.5% (growth in) GDP for 2014," Mr. Chirichella said in a note, adding that he expects global demand forecasts to sink this week in a reflection of the weaker Chinese data.

The state of Chinese demand for oil is especially important for Russia if other nations impose economic sanctions related to the crisis in Crimea, said Carl Larry, an analyst at Oil Outlooks & Opinions. Russia is the world's second- largest crude exporter behind Saudi Arabia.

"If that market gets squeezed out of the West, it's going to go to the East," Mr. Larry said.

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Oil Sheds Gains After Weak Chinese Data