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June 25th, 2013 
Peter Nolan
OIL prices tumbled for the second straight day amid market fears about Federal Reserve plans to ease stimulus and signs of slowing growth in China.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for August, dropped $1.45 in its first day of trade, closing at $93.69 a barrel.
Brent North Sea crude for delivery in August lost $1.24 at $100.91 a barrel in London trade.
Both contracts extended Thursday losses that were the largest since November as markets dived in reaction to Federal Reserve Chairman Ben Bernanke’s signal Wednesday that the Fed quantitative-easing (QE) stimulus may begin winding down by year-end.
In the past two days WTI, which had surged higher since early June, shed more than $4.50.
The oil market opened, like stock markets in Europe and the US, in a minor rebound from Thursday’s financial markets meltdown, but that soon faded.
“The summer solstice brings in more uncertainty in the market place. As the Fed starts the great exodus from QE the market has to get ready for the great unwind,” said Phil Flynn of The Price Futures Group.
The dollar continued to strengthen, rising 0.7 per cent against the euro, making dollar-priced crude oil more expensive for buyers using weaker currencies.
Slowing growth in China, the world’s largest energy consumer — seen in Thursday’s reading on slowing manufacturing activity — and a credit crunch also held back the market.
Chinese media reported Friday that the central bank had injected 40 billion yuan ($6.3 billion) into several banks to relieve the funding crisis.
Elsewhere in oil market news, Chinese state firm CNPC signed a $270 billion deal with Russian oil giant Rosneft to supply China with oil for 25 years.
The deal shifts Russia’s focus away from recession-mired Europe to fast-growing Asia.
“The European market is stagnating, the structure of demand is changing — less oil is being bought and more oil products — so it is not a very promising market,” said Valery Nesterov, an analyst at Sberbank CIB.
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