Reduced opportunity for loan money in the globe's second-largest consumer tugged down West Texas Intermediate crude oil futures on Monday after the energy commodity had gained earlier during the trading session, according to Bloomberg.
A Chinese state-owned newspaper said some banks slashed loan availability to developers as questions mount about the stability of the Asian nation's housing and property market. The session's earlier climb was linked with forecasts for arctic air to return to the Midwest and Northeast of the U.S., which is the globe's largest consumer of crude oil.
Lenders like Industrial Bank Co. in China have cut loan money availability to the nation's property division, according to Shanghai Securities News.
"Risk appetite remains limited," senior analyst Myrto Sokou with Sucden Financial Ltd. in London told the news source on Monday. "Investors remain cautious regarding the prospects of the emerging markets."
At 9:05 a.m. on Monday, WTI crude oil futures climbed 0.28 percent, a 29-cent lift to $102.49 per barrel. At 9:06 a.m., Brent crude oil futures edged up 0.08 percent, a 9-cent increase to $109.94 per barrel.
The People's Bank of China isolated property developers earlier this month as one of the three kinds of borrowers who are most in peril while the Asian nation works to confront debt. The Chinese Academy of Social Sciences said the debt is presently at 215 percent of the nation's gross domestic product.
Inclement weather to impact prices
Two storm systems are manifesting in the U.S. and threatening to drop more snow to the Northeast region of the nation, according to the National Weather Service.
Both the Northeast and the Midwest are bracing themselves for additional rounds of coldness, which prompts demand for oil.
The past two-plus months have seen regions of the U.S. endure sever cold weather, which places an onus on stronger demand for heating oil, The Wall Street Journal reports.
One analyst told the news source that crude oil prices will climb as the U.S. economy grows stronger.
"However, in our opinion, a recovery in the U.S. economy is likely to result in higher demand for gasoline. As such, crude oil prices are likely to remain well supported even after winter," analyst Tan Chee Tat with Phillip Futures told the news source.
Thus far this year, WTI crude oil futures are up roughly 4 percent after having achieved gains for six consecutive weeks, according to The Wall Street Journal. By contrast, Brent crude oil futures are down about 1 percent thus far in 2014, despite having rallied for three consecutive weeks.
Geopolitical strife influence energy commodity
Reuters reports production of the energy commodity in oil-rich Libya slumped this past weekend amid demonstrations.
Following protests at El Sharara oil field, output fell to 230,000 barrels per day on Sunday. The nation's typical generation neared 1.4 million barrels per day prior to widespread protests beginning in the middle of 2013.
"As long as the Libyan security situation is unstable, global oil prices will be buoyed," analyst Michael Poulsen with Danish consultancy Global Risk Management told Reuters on Monday.
Analysts, traders and investors also focused on other hotspots in the Middle East.
Political tensions in nations such as Iran and Syria augment the likelihood of disruptions to supply lines, which also pushes up the price of the energy commodity.
Ongoing civil trouble elsewhere, like Ukraine and South Sudan, also has the potential to spur crude oil prices higher in value.
"One of the reasons for the price staying up around $110 is the geopolitical risk, with reduced exports coming out of Libya, negotiations over lifting sanctions on Iran going very slowly, Syria remaining in the background and maybe Ukraine as well as South Sudan," oil futures broker Christopher Bellew with Jefferies Bache told Reuters on Monday.
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