(Recasts lead, Chinese oil products pipeline shut)
By Maryelle Demongeot
SINGAPORE, May 13 (Reuters) - Oil fell more than $1 towards
$123 a barrel on Tuesday on profit-taking after a fall in
China's oil imports in April, the first on-year drop in 18
months, raised questions over demand in the world's second
largest oil consumer.
U.S. light crude for June delivery <CLc1> dropped 98 cents
at $123.25 a barrel by 0455 GMT, after earlier falling to as
low as $123.10. It had settled on Monday down a hefty $1.73
after striking a new intraday record high of $126.40.
London Brent crude <LCOc1> fell 92 cents to $121.99.
"When news like the Chinese imports comes out, it makes
sense to take profit. But is demand really killed or only
rationed? It will take a lot of damage to revise the overall
trend," said Tony Nunan, risk management executive with
Tokyo-based Mitsubishi Corp.
China's April crude oil imports fell by 3.9 percent from a
year ago to 3.47 million barrels per day (bpd), and were also
down from the record of 4.07 million bpd in March, official
Chinese data showed.
The market has kept a close watch on oil demand in China
and India, whose economic booms have helped send prices up
six-fold since 2002.
But analysts said the dip in Chinese imports may be a
one-off adjustment, as refiners ran down stocks after unusually
high March purchases.
Following quick growth in the first quarter, year-to-date
imports are still up 9.8 percent on a year earlier.
[]
Traders also tried to assess the impact of a strong
earthquake in the southwestern province of Sichuan, where the
death toll neared 10,000.
PetroChina <0857.HK> has suspended oil flows at a major
fuel pipeline to check for possible damage after a powerful
earthquake hammered southwest China, company sources said.
A prolonged halt at the pipeline that supplies most of the
fuel to the quake-hit region could force production cuts at the
200,000 barrels per day (bpd) Lanzhou refinery, the largest in
western China, the sources said. []
Supply disruptions in the North Sea and a weak dollar
helped push oil prices up more than 10 percent since the
beginning of the month, while a still weak dollar has sent
investors scurrying for dollar-denominated commodities such as
oil.
Weekly U.S. inventory data to be released on Wednesday will
provide further direction to the market after an unexpected
fall in distillates stocks, which include heating oil and
diesel fuel, pushed prices to new highs last week.
U.S. crude oil inventories are expected to have risen for a
fourth-straight week, by an average 1.9 million barrels on an
uptick in imports, while products stocks would also rise,
helped by an increase in refinery utilisation, a preliminary
Reuters poll of analysts found. []
Distillate supplies were expected to have risen 1.0 million
barrels. Gasoline stocks were seen posting a small increase of
300,000 barrels.
(Editing by Ramthan Hussain)
