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Oil down as China's GDP comes in below expectations

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(Globalpost/GlobalPost)

Oil prices fell sharply in Asian trade Monday after China's first-quarter economic growth came in below forecasts, with sentiment also weighed by forecasts of weaker global demand.

New York's main contract, light sweet crude for delivery in May dropped $2.55 to $88.74 a barrel and Brent North Sea crude for May shed $2.04 to $101.07 in afternoon trade.

"China's GDP that came in slightly below expectations is having a negative impact on oil prices," Jason Hughes, head of sales trading at CMC Markets in Singapore, told AFP.

"Dealers were looking for China to add support to the market. The fresh data suggests that the Chinese economy hasn't bottomed out... as people have thought."

China's gross domestic product slowed to 7.7 percent in the first quarter of this year, the government said Monday.

The result, announced by the National Bureau of Statistics, compared with a median 8.0 percent forecast in a poll of 12 economists by AFP. The economy expanded 7.9 percent in the fourth quarter of last year.

"Macroeconomic data from China, which is an important figure, is probably having an effect on the more than a dollar fall in prices," said Shailaja Nair, associate editorial director for Asia at energy market information provider Platts.

"We've not seen good news with macroeconomic data since Friday, with weak US data and underlying concerns over the eurozone," she told AFP.

US retail sales fell 0.4 percent in March from February, Commerce Department data showed Friday, suggesting that higher taxes and government spending cuts were taking a toll on the economy.

Prices were also dampened by forecasts of lower global demand by the Organization of Petroleum Exporting Countries, the International Energy Agency and the US government's Energy Information Administration.

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http://www.globalpost.com/dispatch/news/afp/130415/oil-down-chinas-gdp-comes-below-expectations-0