SINGAPORE: Brent futures slipped towards $103 a barrel on Monday as both implied oil demand and refinery crude throughput in the world's second-largest oil consumer China fell to eight-month lows, with a firm dollar also weighing on prices.
China's refinery crude throughput fell 3 percent in April from March, notching its lowest daily rate since last September, as refineries entered maintenance season. Annual industrial output growth quickened to 9.3 percent in April, recovering from a seven-month low in March, but missed market expectations.
Brent crude slipped 71 cents to $103.20 a barrel by 0622 GMT. It settled down 56 cents on Friday and ended the week lower after gains in the previous two. US oil fell 77 cents to $95.27 a barrel, sliding for a fourth session out of five.
"The industrial production data confirms the view that China's growth momentum is slowing," said Natalie Rampono, an analyst at ANZ. "For oil, the numbers are weak because there is still a lot of capacity under maintenance."
The surprisingly muted factory output growth data in April has darkened the outlook for China's economic recovery. It also fed expectations that the government may take policy action to support growth.
"The weak industrial output data makes a good case to cut interest rates," Rampono said. "That's more so because inflation in China is quite subdued."
Oil has remained under pressure because of a firm dollar, and on renewed worries of a slowdown in demand growth from the world's top oil consumer the United States.
The US economy is expected to grow at a slower pace in the second and third quarters of this year, according to the Philadelphia Federal Reserve's quarterly survey of 42 forecasters, compared with their previous estimates. Additional pressure for risk assets came from a broad rally in the dollar following strong data on the US labour market.
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