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China's economy grows 4.5% in first quarter
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U.S. interest rates and dollar strength weigh
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Baghdad, KRG take step towards Iraq northern oil exports
restart
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Coming up: API supply report at 2030 GMT
(Updates prices)
By Alex Lawler
LONDON, April 18 (Reuters) - Oil fell for a second day
on Tuesday as upbeat Chinese economic data failed to deflect the
focus from a possible increase to U.S. interest rates and wider
concern about the growth outlook.
Crude was also pressured by the Iraq federal government and
Kurdistan Regional Government (KRG) taking a step towards a
resumption in northern oil exports from the Turkish port of
Ceyhan after they were halted last month.
Brent crude fell by 18 cents, or 0.2%, to $84.58 a
barrel by 1336 GMT, giving up early gains. U.S. West Texas
Intermediate lost 2 cents to $80.81.
"The next step may depend on global growth and whether
the economy can weather the recent storm, particularly in the
U.S., where tighter credit could significantly weigh on growth
for the rest of the year," said Craig Erlam of brokerage OANDA,
referring to the oil price outlook.
Earlier in the session oil had found support from figures
showing that China's economy grew by a faster than expected 4.5%
in the first quarter and that oil refinery throughput rose to
record levels in March.
"As things stand, it's all systems go in China, much to the
relief of those betting on higher oil prices," said Stephen
Brennock of oil broker PVM.
But the prospect of another increase to U.S. interest rates,
which has been supporting the U.S. dollar, remained a drag on
sentiment. Traders expect the U.S. Federal Reserve to raise
rates by 25 basis points at its May meeting.
The dollar eased on Tuesday after earlier gains. A stronger
dollar makes commodities priced in the U.S. currency more
expensive for buyers holding other currencies.
Coming into focus on Tuesday will be the latest snapshot of
U.S. inventories. Analysts expect U.S. crude inventories to fall
by about 2.5 million barrels and also forecast declines in
gasoline and distillates.
The first of this week's two reports, from the American
Petroleum Institute, is due at 2030 GMT.
(Reporting by Alex Lawler
Additional reporting by Arathy Somasekhar and Trixie Yap
Editing by David Goodman and Susan Fenton)
