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Oil prices continue lower

Friday, March 08 07:21:36

Brent futures fell below $111 a barrel today as a restart of a crucial North Sea pipeline weighed on prices, with forecast-beating Chinese exports helping stem further losses.

China's exports jumped by a fifth in February from a year earlier, boosting Asian shares and supporting base metals. Investors shrugged off a fall in oil imports last month by the world's second-biggest consumer, citing a demand lull during the Lunar New Year break and a high base a year ago when imports were the second highest on record.

Brent futures fell 18 cents to $110.97 per barrel at 0644 GMT. The contract has eased nearly 7 percent from this year's high of $119.17 on demand growth uncertainty. U.S. oil slipped 13 cents to $91.43, after ending more than a $1 higher in the previous session on an unexpected drop in U.S. unemployment benefits.

"Oil prices have fallen quite a bit from the highs, so they should stay near the support levels for now," said Tony Nunan, an oil risk manager at Mitsubishi in Tokyo.

Nunan expects Brent to be supported at the 200-day moving average of $109.22. Oil prices rose in the first three weeks of the year on expectations of buoyant global economic growth but quickly gave up gains on concerns central banks would curtail their policy easing measures.

Brent is set to gain 0.5 percent, snapping three straight weekly losses, while U.S. oil is expected to gain 0.8 percent after two straight weeks of losses.

China's crude oil imports in February fell nearly 9 percent from a year earlier on a daily basis, customs data showed on Friday. February's daily rate was down 8.9 percent from a high base a year earlier when imports hit 5.95 million bpd, the second highest on record.

But the fall comes against a backdrop of a rise in imports to a record 5.42 million barrels per day (bpd) in 2012, a pace quicker than the previous year as new refining capacity came on stream over the final quarter of 2012, customs data showed.

"Imports were really high at the end of the year and so was implied demand," said Nunan. Therefore, the slide in imports is not a surprise, he said. ( C) Reuters