Oil prices fall on China credit tightening

Global oil prices weakened Tuesday on concerns the major energy consumer China will make further moves to tighten its monetary policy so as to slow its booming economy, analysts said.

New York's main futures contract, light sweet crude for delivery in March, slid 37 cents to US$ 74.89 a barrel. London's Brent North Sea crude for March was down 31 cents to 73.38 dollars in late afternoon deals.

Prices were driven lower on "concerns that China might further restrict bank lending," said Victor Shum, an analyst at energy consultants Purvin and Gertz.

"That's what's driving the market," he added.

Policymakers in China have taken steps to tighten credit in a bid to slow down its roaring economy, which grew by a sizzling 10.7 percent in the fourth quarter of last year.

China is the world's second biggest oil consuming nation after the United States.

Meanwhile, reports say that gasoline reserves in the United States increased by a larger-than-expected 3.9 million barrels in the week ending January 15, striking a two-year high.

People's Daily Online -Agencies