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WTI Oil Falls as China Export Drop Signals Slower Growth

West Texas Intermediate and Brent crudes fell for the first time in three days after exports from China unexpectedly shrank, stoking speculation the world’s second-largest oil consumer may miss economic growth targets.

Futures lost as much as 1.5 percent in New York. China’s overseas shipments declined by 18.1 percent in February from a year earlier, the biggest drop since August 2009, the General Administration of Customs reported on March 8. A median 7.5 percent increase was projected in a Bloomberg News survey of 45 economists. WTI rose 1 percent on March 7, the most in four days, as hedge funds increased bullish bets.

“Falling Chinese exports could be seen as sign of a slowing global economy,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. While the data has “spooked the oil market,” the Chinese economy is still forecast to expand by 7.3 percent this year, he said.

WTI for April delivery slid as much as $1.53 to $101.05 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.24 as of 12:37 p.m. London time. Prices were stable last week, snapping a seven-week advance. The volume of all futures traded was 1 percent less than the 100-day average.

Brent for April settlement fell as much as $1.25 to $107.75 a barrel on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $6.81 to WTI on ICE, compared with $6.42 on March 7. The spread narrowed for a fourth time last week.

Chinese Economy

The decline in China’s exports was the most since the global financial crisis five years ago, dealing a blow to confidence after Communist Party leaders meeting in Beijing set a 7.5 percent economic growth target for this year. The nation imported 23.05 million metric tons of crude in February, down 18 percent from a record-high in January, customs data show.

China will account for about 11 percent of global oil demand in 2014, compared with 21 percent for the U.S., according to forecasts from the International Energy Agency in Paris.

“Today’s stats have undermined the prices of commodities dependent on Chinese demand,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London. “Still, the statistics that come from emerging markets tend to be a bit bumpy, with quite big swings, and the picture is still for higher growth than in mature economies.”

Price Supportive

In Libya, the government vowed to prevent an oil tanker from leaving a rebel-held port as it seeks to reassert control over the country’s main source of revenue. The vessel arrived in Es Sider, the nation’s largest export terminal, after Libyan armed forces refused orders to fire on the ship, Prime Minister Ali Zaidan said on March 8. Libya controls Africa’s biggest crude reserves.

“This is price-supportive,” said Commerzbank’s Fritsch. The tanker detention will make it more complicated to find a solution to the crisis, he said.

Hedge funds and other large speculators expanded their net-long position on WTI in the week ended March 4, according to the U.S. Commodity Futures Trading Commission. Managed money bets that prices will advance, in futures and options combined, outnumbered short positions by 346,544 contracts, the Washington-based regulator said in its weekly Commitments of Traders report on March 7. ICE will release its data on Brent at midday London time.

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