Oil Drops After Emerging Market Demand Doubtful

West Texas Intermediate reversed earlier gains on concern demand in emerging markets may slow after a Chinese state-owned newspaper said some banks curbed loans to developers in the world’s second-biggest oil user.

WTI futures traded near their lowest closing level in a week in New York, after erasing an earlier gain of 0.5 percent. Brent futures reversed an increase of 0.4 percent in London.

Industrial Bank Co. and other unidentified lenders have curbed loans to the property sector and related industries such as steel and cement, Shanghai Securities News reported. Prices advanced earlier on forecasts that arctic air will return to the U.S. Northeast and Midwest this week, bolstering demand for heating fuel in the world’s largest oil consumer.

“Risk appetite remains limited,” said Myrto Sokou, senior analyst at Sucden Financial Ltd. London. “Investors remain cautious regarding the prospects of the emerging markets.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza