The price of oil sunk to around $101 on Monday after a surprise drop in China's exports and weaker economic growth in Japan suggested demand for crude could weaken.
By early afternoon in Europe, benchmark U.S. crude for April delivery was down $1.64 to $100.94 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contract added $1.02 to close at $102.58 after encouraging U.S. employment figures for February.
Brent crude, used to set prices for international varieties of crude, was down $1.19 to $108.11 on the ICE Futures exchange in London. China's customs data showed over the weekend that exports plunged by an unexpectedly large 18 percent last month. Robust trade is crucial in helping China achieve its official economic growth target of 7.5 percent for this year. However, exports in February last year might have been overstated by exporters inflating sales figures as an excuse to evade currency controls and bring extra money into China.
Japan, meanwhile, revised down its growth estimate for the final three months of last year — to 0.7 percent from 1 percent — after announcing a record current account deficit for January. Japan's Cabinet Office said both private and public demand was lower than its earlier estimate.
Monday's drop in the oil price followed a surge last week that was driven by severe winter weather in the U.S., which raised demand for heating oil. Tension over Russia's military incursion into Ukraine's Crimean Peninsula and Libya's sustained struggles to normalize its oil production and export activities boosted supply risks and kept prices from falling further.
"So far, Russia is showing no sign of yielding in the crisis," said analysts at Commerzbank in Frankfurt in a note to clients. "This means there is a risk of further sanctions being imposed by the West on Russia, which is Europe's most important energy supplier."
In other energy futures trading on Nymex: — Wholesale gasoline fell 3.43 cents to $2.9395 per gallon. — Heating oil dropped 4.31 cents to $2.969 per gallon. — Natural gas lost 3.1 cents to $4.587 per 1,000 cubic feet.