Oil drops under $90 on China growth worries (AP) (21-01-2011)

BANGKOK – Oil prices were under $90 a barrel on Friday in Asia after a big fall on the previous session waiting for China to take more aggressive steps to slow its torrid economic growth.

Benchmark crude for March delivery was up 14 cents at $89.73 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract lost $2.22 to settle at $89.59 on Thursday.

Oil prices were restrained by the Energy Department's weekly report that showed growing U.S. stockpiles of oil, gasoline and distillates, which include heating oil and diesel fuel. All are higher than the five-year average, an indication that energy demand remains tepid.

According to the Energy Information Administration, natural gas supplies fell more than expected last week, as very cold weather covered much the country. But supplies are still about 2 percent above the five-year average.

In other Nymex trading in February contracts, heating oil was down 0.4 cent at $2.619 a gallon while gasoline rose 0.5 cent to $2.428 a gallon. Natural gas added 1.7 cents to $4.71 per 1,000 cubic feet.

In London, Brent crude declined 8 cents to $96.50 a barrel on the ICE futures exchange.

Source: AP