NYMEX-Crude dips on Greece rating, Chinese economy concerns

SEOUL, June 14 (Reuters) – U.S. crude futures fell in early Asian trade on Tuesday, with dealers concerned over prospects of lower oil demand in the wake of rating agency S&P’s credit rating downgrade of Greece and signs of a cooling Chinese economy.

 

FUNDAMENTALS

* U.S. July crude lost 45 cents to $96.85 a barrel by 0029 GMT, after settling at $97.30 a barrel in the previous session.

* ICE Brent for July delivery fell 35 cents to $118.75 a barrel versus its previous settlement at $119.10.

* The premium of Brent crude oil futures over U.S. crude futures hovered around its record level above $21 per barrel marked on Monday. Brent crude drew support from geopolitical risk, tightening supplies in Europe and spurring predictions for demand to grow while OPEC fails to raise output as a group, and West Texas Intermediate crude has been under pressure from high inventories.

* Greece became the lowest-rated country in the world according to Standard & Poor’s, which downgraded it on Monday and warned that any attempt to restructure the country’s debt would be considered a default.

* China’s inflation probably accelerated in May to 5.4 percent, adding to the case for the central bank to tighten monetary policy further even as there are signs that economic growth is slowing down.

* Syrian troops pushed towards the northern town of Maarat al-Numaan on the Damascus-Aleppo highway after rounding up hundreds of people in a sweep through villages near Jisr al-Shughour, fleeing residents said.

* Libyan rebels edged slowly beyond their western stronghold of Misrata towards Tripoli, but faced supply shortages after shelling from Muammar Gaddafi forces hit a key refinery in the city.

* Yemen said on Monday it had arrested several people suspected of trying to kill President Ali Abdullah Saleh whose country, torn by protests against his rule and other conflicts, stands on the brink of civil war.

 

MARKETS NEWS

* Despite jitters over Greece, U.S. stocks finished flat, recovering from a mild sell-off tied to Standard & Poor’s downgrade of Greece to close to default status. The Nikkei average was little changed on Tuesday.

* The safe-haven Swiss franc held near a record high against the euro in Asia on Tuesday, benefiting from the ongoing European debt crisis, while the greenback stayed under pressure as other currencies like the Australian dollar squeezed higher.