Brent Slides On Chinese Slowdown Concerns
Demand growth worries helped lower Brent crude oil to $107.61 at 4:22 GMT on Monday morning. The commodity was under pressure as investors looked worriedly at China's financials, fearing a slowdown.
Reuters reported that Chinese economic growth is expected to gradually decline over the next two years. A poll of economists showed that most see the nation's 2014 growth slipping to 7.4 percent, the country's slowest pace of expansion since 1990.
Worries about the Middle East helped mitigate some of the losses as investors kept an eye on the lingering geopolitical crisis in the region. Although the Western leaders and Iranian officials were able to come to a temporary agreement about Tehran's nuclear program last year, on Friday the UN's nuclear chief admitted the two still had a long way to go before complete resolution. His statement came just days after Iran began making the adjustments needed to keep up its side of the deal to curb its nuclear program.
Meanwhile, a dispute over oil exports between Turkey, Iraq and ethnic Kurds is keeping a floor under Brent prices. The Kurdistan Regional government, Iraq's northern province, has been developing its oil industry despite resistance from the nation's central government. Now, oil is flowing through a new pipeline to Turkey in defiance of Baghdad. The Iraqi government has threatened punishment, saying the Kurds are 'smuggling' oil out of Iraq.
Moving forward investors will look to US GDP data this week for more clues about whether or not the US Federal Reserve will continue to taper its bond buying plan. The central bank began cutting down last year, and some believe it will cut a further $10 billion from its asset buying scheme at its next meeting.
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