SINGAPORE: Brent crude edged down towards $106 per barrel on Monday, pulled lower by a strong dollar, while robust Chinese economic data helped ease some fears of a hard landing in the world's second largest economy.
The initial reaction on oil markets was largely muted after data on Monday showed the Chinese economy eased to 7.7 percent between October and December, from 7.8 percent in the previous three months and slightly ahead of market expectations for growth of 7.6 percent. "I would think the data is supportive of oil prices.
I am certainly expecting somewhat of a relief rally in risk asset over the next 24 hours," said Ben Le Brun, a market analyst at OptionsXpress in Sydney.
"The data is a cause for relief, as it eases some of the fears over the Chinese economy," he said.
Brent crude for March delivery was down 18 cents at $106.30 per barrel at 0314 GMT, after closing up 73 cents on Friday. US crude for February delivery was trading 67 cents lower at $93.70 per barrel, after settling up 41 cents at a two-week high on Friday.
Floor trading will be closed on Monday and there will be no settlement on the New York Mercantile Exchange due to the Martin Luther King, Jr. Day holiday.
"The stronger dollar looks like it had quite a big impact in the Asian session. I think that's at least part of the reason we're seeing prices lower," said Le Brun.
The dollar index, a gauge of the dollar's value versus six major currencies, was a tad lower on Monday at 81.194, but still close to its highest level in nearly 10 weeks reached on Friday.
In other data, China's industrial output grew 9.7 percent in December from a year ago, compared to expectations of 9.8 percent in the Reuters poll.
A slowdown in China's growth has raised fears of a hard landing for the economy.
China has been the main driver for global oil demand in the past decade, and the country last year overtook the United States as the world's biggest oil importer.
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