Brent crude is down slightly in early morning trade Thursday, as
worries about inflation in China increased concerns about global
economic growth prospects.
China's National Bureau of Statistics reported that inflationary
pressure reached a 16-month high, as consumer prices rose 2.7% in
February from a year ago, slightly above what most Wall Street
analysts had been expecting.
At 0745 ET, Brent crude is down 0.1% at $80.43 barrel, while
light sweet crude is up 0.1% at $82.20 a barrel, and natural gas is
down 0.5% at $4.53 a million British thermal units.
Industrial production in China, meanwhile, rose 20.7 percent
dudring the first two months of this year, which is the biggest
increase for that period in over five years. Rising inflationary
pressure, coupled with a rapid rise in production, is increasing
market speculation that the Chinese authorities will tighten
monetary policy sooner rather than later. Higher interest rates in
China, in turn, is expected to be a blow to the global economy as
China has been a key driving force behind the world's still-shaky
economic recovery, compensating for lackluster growth in the United
States and Europe, as well as Japan.
On the corporate front, British oil giant BP Plc (
) will pay $7 billion Oklahoma's Devon Energy Corp.'s (
) assets in Brazil, the Gulf of Mexico, and Azerbaijan. Devon, in
turn, will buy a 50% stake in BP's Kirby oil sands project in
Canada for $500 million and meet $150 million of BP's capital
costs. Through the acquisition, BP will be able to have access to
deepwater exploration in eight blocks in the Campos and
Camumu-Almada Basins as well as two onshore licenses in the
Meanwhile, British chemical group Ineos Group Holdings Plc shut
down a diesel unit at its Lavera oil refinery for maintenance. The
hydrocracker at its French refinery will undergo four weeks of
maintenance, but will be back in operation by the end of March,
Ineos said. Its Grangemouth refinery in Scotland will be shutting
down as well for about 45 days for maintenance.
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