NEW YORK: Oil fell from 15-month highs to below $83 a barrel on Thursday as signs of tighter monetary policy in China sparked concerns about demand growth in the world’s second-largest energy consumer.
China’s central bank surprised markets by raising the interest rate in a three-month bill auction, which the markets took as a signal of policy tightening, putting pressure on commodities and clipping 10 straight days of gains for oil.
China’s rapidly expanding economy and its burgeoning thirst for oil has been seen as one of the main reasons crude prices have more than doubled in the past 12 months, despite the lingering impact of the economic crisis.
US crude for February delivery fell 45 cents to $82.73 a barrel by 11:35 a.m. EST (1635 GMT), off Wednesday’s 15-month high of $83.52. London Brent crude fell 45 cents to $81.44 a barrel.
Meanwhile, European equities retreated from a 15-month high to finish slightly lower on Thursday, led down by telecommunications shares, with investors cautious ahead of Friday’s keenly watched US non-farm payrolls data.
The FTSEurofirst 300 index of top European shares closed 0.1 percent lower at 1,060.15 points after rising in the previous session to a high of 1,064.36 — the highest since October 2008. The index rose 26 percent in 2009 and has surged 64 percent since hitting a record low in March last year.
In New York, the Dow Jones Industrial Average rose 9.14 points (0.09 percent) to 10,582.82 at 1615 GMT, after drifting slightly higher for two straight days.
The technology-heavy Nasdaq composite dropped 4.19 points (0.18 percent) to 2,296.90 and the broad-market Standard & Poor’s 500 index advanced 1.15 points (0.10 percent) to 1,138.29.
Japan Airlines (JAL) shares plunged again Thursday as fears mounted that the debt-ridden carrier will file for bankruptcy, despite reports it is set to get an injection of public funds. Asia’s biggest carrier sank 9.5 percent to end at 76 yen, continuing their recent rollercoaster ride on the Tokyo stock market.
“Investors are selling on renewed fears that JAL could file for bankruptcy,” said Makoto Murayama, an analyst at Nomura Securities.
