Tuesday, December 28, 2010

Crude Oil Declines From 26-Month High on Concerns China's Growth May Ease

Crude oil fell from a two-year high in New York as China’s second interest-rate increase since October bolstered concern that economic growth will slow in the biggest energy-consuming country.

Futures snapped five days of gains after the People’s Bank of China boosted benchmark one-year lending and deposit rates by 25 basis points Dec. 25 to curb inflation. Oil advanced earlier as temperatures fell and storms blanketed the eastern U.S. with snow, raising demand for heating fuels.

“There’s a feeling that the Chinese interest-rate move will slow economic growth,” said Peter Beutel, president of Cameron Hanover Inc., a trading-advisory company in New Canaan, Connecticut. “This could diminish demand for energy or at least slow projected growth, which has powered the recent rally.”

Crude oil for February delivery fell 51 cents, or 0.6 percent, to settle at $91 a barrel on the New York Mercantile Exchange. Futures earlier climbed to $91.88 a barrel, the highest intraday level since Oct. 7, 2008. Prices are up 15 percent this year. (more)

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