WTI crude falls from two-week high as China factory output slows

China ’Key’

“China is the key” in the short term, said Robin Mills, the head of consulting at Manaar Energy Consulting and Project Management in Dubai. “It’s very important to watch for any sign of weakness. I think demand there is much more sensitive than in the U.S. and Europe.”

Annual oil demand in China will increase to 500 million metric tons from 490 million in 2013, Bo Qiliang, a vice president at PetroChina Co., said today in an interview while attending an energy conference in Doha.

WTI on Jan. 17 capped its first weekly gain since December amid signs the U.S., the largest oil user, will sustain its economic growth.

Large speculators reduced bullish bets on WTI by 17,455 futures and options combined to 229,722 in the week ended Jan. 14, according to the Commodity Futures Trading Commission. That’s the lowest level since Nov. 26. Long positions held by money managers, including hedge funds, commodity pools and commodity-trading advisers decreased by 7,066 futures and options combined, while so-called shorts climbed by 10,389.

Hedge Funds

Hedge funds and other money managers reduced bullish bets on Brent crude to the lowest level in 14 months, according to data from ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 85,658 lots in the week ended Jan. 14, ICE said today in its weekly Commitments of Traders report. The cut of 14,438 contracts, or 14%, is the second weekly reduction and brings net-longs down to their lowest since Nov. 13, 2012.

Ultra low sulfur diesel for February delivery gained 1.13 cents, or 0.4%, to $3.035 a gallon on Nymex on volume that was 73% below the 100-day average. February gasoline futures were up 1.15 cents at $2.6319 a gallon. Trading volume was 83% below the 100-day average.

Regular gasoline at U.S. pumps, averaged nationwide, fell 0.3 cent to $3.287 a gallon, a ninth consecutive decline, according to data from Heathrow, Florida-based AAA, the nation’s largest motoring company. Prices are 2 cents below a year ago.

The International Energy Agency, an adviser to oil- consuming nations, will publish its monthly market report tomorrow with forecasts of oil supply and demand for the coming year at 10 a.m. in Paris.

www.bloomberg.com

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