Oil Prices Drop as China Cuts Lending

As of 9:04 am EST, the price of crude had declined by 1.7 percent to reach $74.01 a barrel and the price of heating oil had fallen by 1.4 percent.

HEAT USA Price Report

Today’s average retail heating oil price per gallon: Up $0.01
Morning projection (for Monday’s average price per gallon): Down $0.03

A move by China’s central bank to restrict lending aims to slow down growth in China’s economy, which will curb its energy demand and has driven down oil prices. The central bank has required banks to set aside more deposits as reserves, reducing the amount of money available for lending. In addition to lowering expectations for global oil demand, China’s new banking rule has boosted the dollar, dragging down demand for and prices of dollar-denominated commodities like crude oil and heating oil.

HEAT USA price experts report that the EIA inventory report will be released Friday morning, having been delayed by this week’s storm. If the EIA numbers approach the API’s finding that crude oil inventories grew by more than seven million barrels, that will deal another blow to oil prices.