Brent slips below $107, shuns robust China oil data

LONDON: Brent crude fell below $107 a barrel on Thursday as investors overlooked robust Chinese oil import figures and focused instead on the possibility of Washington scaling back its economic stimulus programme.

Oil market participants worry that if the US Federal Reserve rolls back its monetary stimulus - which could happen next month - liquidity on global markets will be reduced.

That concern outweighed bullish news from China, where overall imports and exports in July beat analysts expectations, with crude oil imports hitting a record 6.15 million barrels per day.

Further decreases in crude stockpiles in top consumer the United States also had little positive effect. Inventories declined by 1.32 million barrels last week, according to the Energy Information Administration.

Brent crude for September delivery fell 53 cents to $106.91 by 0959 GMT, having reached an earlier high of $107.86. US crude slid 21 cents to $104.16.

"Oil prices have found themselves unable to profit from either the sharp fall in US crude oil stocks or the very robust Chinese import figures," said Commerzbank.

"This should be interpreted as a negative sign and suggests that we will see further price falls in the coming days."

Oil's gains were also capped by easing geopolitical tensions between Iran and the United States, while crude exports from the North Sea are scheduled to rise in September after maintenance.

Iran's new president signalled willingness to negotiate with the West over Tehran's disputed nuclear programme but Tehran-watchers say that window could close as each side waits for the other to make the first move.

But tightening supplies in major producers Iraq and Libya kept losses in check.

In Libya, workers' protests remain a key concern. Output of its main crude oil grade, Es Sider, has been shut since Tuesday, along with the fields producing Amna and Sirtica, following strikes at the Es Sider and Ras Lanuf terminals.

Libya's production is expected to fall further as workers at its Arabian Gulf Oil Company (AGOCO) plan to progressively reduce output in protest over management changes and the company's structure.

Also contributing to lower supply is Iraq where exports are set to fall sharply in September as major work is carried out at its vital southern export terminals.

In Yemen, the government said on Wednesday it had foiled a plot by al Qaeda to seize two major oil and gas export terminals and a provincial capital in the east of the country.