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 U.S. crude futures rose slightly, as positive retail sales and labor
market data raised optimism about the economy and outweighed
concerns over China.
Data from China showed growth in investment, retail sales and
factory output all fell in the first two months of the year to
multi-year lows in the world's second largest consumer of oil,
amplifying worries about a slowdown.
"The weak economic numbers and exports out of China in the last week
are driving prices lower," said Oliver Sloup, director of managed
futures with iitrader.com in Chicago.
The Ukraine conflict looked poised for another escalation as
Germany's Angela Merkel warned Moscow it risked "massive" political
and economic damage if it didn't change course. Russia responded by
starting military exercises near the border with Ukraine.
The conflict has provided global oil markets support in recent weeks
because traders worry it could lead to a disruption of oil supplies
from Russia, one of the world's largest oil producers.
U.S. retail sales rebounded in February and new applications for
unemployment benefits hit a three-month low last week, suggesting
some strength in the economy after harsh weather abruptly slowed
activity.
U.S. crude rose 21 cents to settle at $98.20 a barrel. Brent crude
fell 63 cents to settle at $107.39 a barrel.
Thursday's slight rise in U.S crude came after the American
benchmark plunged more than 2 percent on Wednesday to its lowest
level since January, after the government surprised markets by
announcing a test release from its strategic petroleum reserve, and
weekly inventory data showed a larger-than-expected rise in crude
stockpiles.
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The DOE's test sale of crude from its emergency stockpile is the
first since 1990. The United States is offering a modest 5 million
barrels in what some observers saw as a message to Russia from the
Obama administration.
In China, implied oil demand fell 3.1 percent in the
January-February period from a year earlier to roughly 9.98 million
barrels per day (bpd), according to Reuters' calculations based on
preliminary government data.
The Organization of the Petroleum Exporting Countries on Wednesday
reported world oil demand would increase more than expected in 2014,
raising its forecast for a second straight month as economic growth
picks up in Europe and the United States.
(Additional reporting by Robert
Gibbons in New York and Simon Falush in London; editing by Jason
Neely, Jane Baird, Andre Grenon and Chris Reese)
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