China Trade, Import Data Pressures Crude Prices (USO) (OIL)

August 10, 2012 9:31 AM EDT
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Crude is ticking lower Friday following economic data out of China that would make a grown man weep. Or, at least well-up a little.

For July, China's trade surplus fell 20.8 percent to $25.1 billion, from $31.7 billion in June. The consensus was looking for a gain to $35.2 billion.

Additionally, crude imports were 5.14 million barrels per day (bpd) in July, up 12 percent over the same period last year and down 3 percent from June. Given that imports through July (up 10.2 percent) have outpaced China's throughput, some suspect that much of what's imported has been put into storage.

Refiners in China have been slowing the pace on recent declines in crude prices. Generally, refiners lock-in prices early, meaning many expected higher prices at this time of year given the $100 per barrel prices seen in much of 2011.

Thursday, China said its CPI growth slowed to 1.8 percent, the lowest since February and down 0.4 points from June.

Whether numbers indicate overall global pressure from Europe's woes, or that the fallout is now hitting China is yet to be determined. Many will look to global central banks, including the People's Bank of China, for more easing measures aimed at spurring growth. For China, that may mean another key interest rate cut, not unlike the ones administered in May and June of this year.

Friday morning, crude is about $1 lower to $92.35 per barrel on the Comex.

Traders will be eying United States Oil (NYSE: USO), iPath S&P GSCI Crude Oil TR Index ETN (NYSE: OIL), ProShares Ultra DJ-UBS Crude Oil (NYSE: UCO), and various energy companies like Exxon (NYSE: XOM) and Chevron (NYSE: CVX) on the news today.

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