* U.S. refinery utilization drops to 25-year low
* Gasoline inventories jump more than expected
* U.S. proposes to curb proprietary trading at banks
(Adds China demand, South Korea imports)
By Alejandro Barbajosa
SINGAPORE, Jan 22 (Reuters) - Oil fell on Friday to
one-month lows below $76 a barrel after refiners in top
consumer the United States processed the least crude in
decades, reacting to a fuel demand slump, while talk of bank
trading curbs upset speculators.
Proposals by U.S. President Barack Obama to cut proprietary
trading at large banks sent Asian stock markets and commodities
tumbling. Japan's benchmark index lost almost 3 percent, and
the dollar slipped to its lowest in five weeks against the yen.
U.S. refinery utilization, the proportion of total capacity
at which refiners operate, fell 2.9 percentage points to 78.4
percent last week, a government report showed on Thursday. That
was the lowest since the 1980s, barring occasional periods of
hurricane-related disruptions, Department of Energy data
showed.
"For the refinery run rates, it's a bit on the surprise
side," said Serene Lim, a Singapore-based oil analyst at ANZ.
"At this time of year they shouldn't be dropping that much.
With low demand, refiners don't find an incentive to produce
more."
March-settlement U.S. crude <CLc1> touched $75.62 a barrel,
the lowest intraday price since Dec. 23, and was trading down
26 cents at $75.82 by 0529 GMT. Prices have dropped more than
$8 from a 15-month low of almost $84 on Jan. 11. London Brent
crude for March <LCOc1> declined 18 cents to $74.40.
U.S. regulator Commodities and Futures Trading Commission
(CFTC) on Jan. 14 announced proposals to put a cap on the size
of positions dealers can hold, aiming to limit speculation.
Most traders considered the proposals to be not as strict as
feared.
"With last week's CFTC proposals, I thought this would be
over, but then Obama came out yesterday to increase controls,"
Lim said. "Speculators have been very concerned about it."
CHINA GROWTH
Prices were also under pressure from concerns that China
would take further measures to temper its booming economy, Lim
said, after China on Thursday reported fourth quarter growth of
10.7 percent, its first double-digit figure since 2008.
[]
"Any efforts by the Chinese government to slow the economy
would affect demand for raw materials," Lim said.
China's apparent demand for oil products will grow by about
4 percent this year, the National Energy Administration (NEA)
said on Friday, a slower pace than the 6.3 percent growth for
2009, according to Reuters calculations based on official
figures. []
NEA also estimated that an annual total of 20 million
tonnes of refining capacity, or 400,000 barrels per day (bpd),
will be added this year, adding to a supply surplus of the main
refined oil products.
South Korea, the world's fifth-largest crude buyer,
imported 5.9 percent less crude in December from a year
earlier, state-run Korea National Oil Corp said on Friday.
[]
DEMAND DROP
U.S. gasoline inventories rose a larger-than expected 3.9
million barrels the week ended Jan. 15, despite the reduced
operating rates at refineries. Total demand for oil products
over the past four weeks slid by 1.8 percent from a year
earlier.
Demand for distillates, a fuel category that includes
heating oil and diesel, plunged 6.8 percent from a year earlier
following the return of warmer weather to the U.S. Northeast
last week.
Temperatures in the region were forecast to stay above
normal through Tuesday next week, according to Telvent DTN. And
analysts said even another cold snap following unseasonably
cold conditions in late December and early January would have a
limited and temporary effect on prices.
"While a return to cold conditions in the U.S. next week
should be enough to trigger a brief rebound to $80, we must
remember that the clock is ticking on the weather trade and
that demand typically falls by 1-2 million barrels per day in
the second quarter," JP Morgan said in an e-mailed note.
(Editing by Clarence Fernandez)
