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article imageCrude oil prices extend losses

By AFP     Apr 11, 2014 in Business

Oil prices extended losses Friday on poorly-received economic data out of China this week that has raised concerns over potential weaker crude demand from the world's biggest consumer of energy.

Growing expectations that Libyan oil will return to the market after rebels lifted a blockade of crude terminals also helped push prices lower, analysts said.

The International Energy Agency, which advises countries on policy, meanwhile said Friday that the global oil market was returning to balance.

However the IEA added that Russia's annexation of Crimea has clouded the outlook with both supply and demand growth set to slow.

New York's main contract West Texas Intermediate for delivery in May dropped 20 cents to stand at $103.20 a barrel compared with Thursday's closing level.

Brent North Sea crude slid also by 20 cents to $107.26 a barrel in London afternoon deals.

"Global demand is waning due to the slowing growth in China," said Desmond Chua, analyst at traders CMC Markets.

Official data on Thursday showed Chinese imports slumped 11.3 percent in March from a year ago and exports fell 6.6 percent, pointing once more to a slowdown in the world's second biggest economy.

For crude oil alone, China imported 5.54 million barrels per day in March, a decline of 8.0 percent from February and the weakest import volume in five months.

In Libya meanwhile, the National Oil Co. has lifted its force majeure notice from its Al-Hariga oil terminal in eastern Libya, signalling a resumption of exports that could begin as soon as Sunday.

The seizure by rebels of four eastern oil terminals last July in pursuit of their campaign for restored autonomy for the eastern Cyrenaica region slashed output from 1.5 million barrels per day to just 250,000 bpd.

Libya's oil exports are likely to quadruple from current levels and hit 1.0 million barrels per day by mid-June after rebels ended a blockade of two terminals, OPEC Secretary General Abdullah El-Badri said on Friday.

Analysts said oil prices remained propped up also by the heightened tensions in eastern Europe.

With Ukraine a key conduit for Russian gas to Europe, traders fear that any armed conflict will disrupt supplies and send oil and gas prices skyrocketing.

Russian deliveries account for 34 percent of the natural gas supplies to the European Union, according to the Soufan Group, a US-based intelligence firm.

"One month after the events in Crimea, market watchers are taking stock of their impact on oil markets," the IEA said on Friday.

The IEA left its global demand forecast for 2014 roughly unchanged at 92.7 million barrels per day (mbd), and a trim to its forecast for growth in non-OPEC supplies means the global market will need more oil from the cartel later this year.

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