• Over A Barrel
• OPEC Concerns
• China Growth Factor

Crude oil futures traded tentatively early Thursday, with investors collectively holding their breath for the release of Chinese growth data due out tomorrow. The data is expected to show a worsening of the slowdown currently taking its toll on the health of the nation, with most analysts agreeing with the Chinese forecast of 7.5 percent for Q2.

The BRIC powerhouse grew at 8.1 percent in Q1, and speculators are now anxious about pushing prices too high ahead of the anticipated stalled growth. As one of the biggest oil consumers on the globe, further concrete evidence of a flagging economy will do little to support the commodity on charts.

The other corresponding oil-guzzler, the United States, has also done little to bolster oil prices in the last 24 hours. The release of downbeat FOMC minutes that gave little satisfaction to stimulus-hungry speculators is already putting pressure on the asset. Producer of one third of the world’s oil supply, OPEC, has already voice its concern for quashed demand in 2013, besides an expected weak remainder of 2012. "Besides the euro zone crisis, geopolitical tensions in the Middle East, the contraction of manufacturing in the U.S. for the first time since 2010 and decelerating economic growth in emerging markets have been fuelling uncertainties regarding global economic growth," OPEC said in a monthly report.

John T. Sullivan, Thomson Reuters Market Analytics, points out, “the May trade balance in goods and services recorded virtually no change in the service surplus ($14.85 billion) and a slight monthly decline in the goods deficit (-$63.533 billion).  The U.S. largest dollar volume export continues to be automobiles and parts at $25 billion.  The oil trade deficit narrowed to $10.659 billion, its lowest level in three years.”

Energy Agency Issues Warning

Oil’s movement on commodity charts – given the emergence of such damning data from oil consumption giants – has now prompted the International Energy Agency to speak out about a “lid” on the price of oil. But the IEA also warned about the prospect of a nasty rally in the offing should any one of the oil-producing countries cut back on production. Strict adherence to the previous 30 million bpd quota risks a renewed and potentially damaging price surge," the IEA said in its monthly Oil Market Report.

The IEA said the 12 members of OPEC pumped close to 31.8 million bpd in June, before the imposition of an EU oil embargo on Iran on July 1 and tougher U.S. sanctions which have helped to curb the cost of oil. The price of which, the agency added, had "clearly eased since the start of the year".

Fed Disappoints

The latest indication from the Fed over the likelihood of further intervention measures was met with a limp reception from investors. The absence of any unified move on behalf of policymakers to make a step towards further QE has cast doubt over U.S. growth potential moving forward. The FOMC Minutes sent speculators into a dollar-buying frenzy, with the euro dropping to a fresh two-year low against the greenback. As would be expected in conditions where the dollar thrives, oil prices declined as the dollar-price commodity becomes more expensive for holders of other currencies.

Sarah Cox. Markets Writer, ForexSpace.com