LONDON, July 12 (Reuters) - Oil prices fell below $
100 per barrel on Thursday, retreating after a 2 percent rally the previous session, as the International Energy Agency said a slowdown could cap prices while investors waited for China's GDP data due on Friday.
A global economic slowdown could put a lid on oil prices but there is a risk 'nasty supply surprises' could reignite a market rally, the International Energy Agency said on Thursday.
The agency, which advises industrialised countries on energy policy, said market fundamentals had 'clearly eased since the start of the year' and oil stocks had built up significantly over the last few months.
Brent crude fell 90 cents to $99.33 by 0927 GMT, while U.S. crude was at $84.95, down 86 cents.
Oil declined with the euro, which hit a fresh two-year low on Thursday, while European shares also fell on disappointed hopes for action by the U.S. Federal Reserve.
More policy easing may come only if the economy weakens further, minutes from the U.S. central bank's June meeting showed.
In the longer run, a severe slowdown in Chinese growth could end up supporting prices if it prompts the U.S. Federal Reserve to launch stimulus measures, analysts say.
'We still have conflicting push and pull influences, with Iran on one side and a poor economic outlook on the other,' said Roy Jordan at Facts Global Energy.
'If China's GDP data is not good, there will be an economic stimulus program and that will support prices, so there does not seem to be a lot of scope for going lower.'
China's gross domestic product data could show the weakest expansion in three years.
Euro zone industrial production increased by 0.6 percent May from the previous month, data from the European Union statistics agency Eurostat showed on Thursday, against expectations of zero growth.
But the still weak numbers failed to lift oil prices, which slipped by $1 a barrel shortly after the data was released.
A grim outlook for the global economy, already roiled by a festering debt crisis in the euro zone, has muddied the demand outlook for most commodities.
Oil has been hit hard, with prices suffering their largest three-month drop since the 2008 financial crisis in the second quarter.
'All across risk assets, including oil, investors are seeing the global economic outlook as a glass half-empty,' said Ben Le Brun, a markets analyst at OptionsXpress in Sydney. 'There is a lot of caution ahead of the Chinese data.'
(Additional reporting by Florence Tan and Manash Goswami, Editing by Himani Sarkar and Jason Neely) Keywords: MARKETS OIL/
COPYRIGHT Copyright Thomson Reuters 2012. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk!
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.