Oil prices slide as Chinese crude imports slow

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World oil prices fell under 80 dollars on Tuesday as official data showed crude imports slowing in China, the world's second biggest energy consumer behind the United States, traders said.

Brent North Sea crude for delivery in September sank 1.14 dollars to 79.85 dollars a barrel in midday London trade.

New York's main contract, light sweet crude for delivery in September, dropped 88 cents to 80.60 dollars.

China's crude oil imports fell sharply to 19 million metric tonnes, or 4.5 million barrels a day in July, customs authorities said.

That was much lower than the record 22.27 million tonnes seen in June and 3.1 percent lower compared with the level in July 2009.

"The import data from China put a strain" on prices, said Commerzbank analyst Carsten Fritsch, who cautioned that the figures were skewed by the record imports in June and a recent pipeline explosion in China.

"Worries regarding a lasting weakening of demand seem to be premature," Fritsch said.

"The distinct decline of imports compared to June can be explained, on the one hand, with the record imports in the previous month. In addition, there was a pipeline explosion in the port of Dalian in the middle of July which temporarily affected imports.

"The damage has meanwhile been repaired ... (so) a normalisation of imports may be expected in August," Fritsch added.

Later on Tuesday, all eyes will be on the US Federal Reserve, which will announce its latest monetary policy decision amid pressure to bolster the American economy after recent disappointing data.

The Fed is expected to keep borrowing costs on hold but it will be closely watched for any sign of bowing to pressure for a return to crisis-era stimulus after poor US jobs data last week.

"It will be hard to take the Fed seriously if a more forthright acceptance of the array of softer data is not forthcoming," said Ian Shepherdson, an analyst at the High Frequency Economics consultancy.

Recent data has suggested the US economy is slowing. The Labor Department reported Friday that 131,000 jobs were lost in July, far more than expected.

- Dow Jones Newswires contributed to this report -

© 2010 AFP

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