Oil slipped to $74 today after stronger-than-expected Japanese growth data was overshadowed by concerns that rising energy demand could be curbed by China's moves to tighten monetary policy.
Crude fell for the first time in four days on Friday, shedding around 1.5 per cent after China's central bank increased the percentage of cash banks must keep as reserves for the second time this year. China's booming economy is at the centre of global commodity demand growth.
By 0856 GMT today, US crude for March delivery had fallen by 13 cents to $74.00 a barrel. London ICE Brent for April delivery declined 20 cents to $72.70.
"When you look at prices I don't see much more downside," said Mark Pervan, senior commodities analyst at ANZ in Melbourne. "China, Japan, Korea, Taiwan and other Asian economies are going to perform very well this year notwithstanding what the Chinese government is doing to control growth."
Oil has traded in a relatively tight $15 range between $69 and $84 a barrel since the beginning of October. At the peak of the financial crisis, oil crashed below $40 a barrel from a July 2008 record of almost $150, but expectations of an economic recovery have supported prices since then.
Japan's economy grew faster than expected in the fourth quarter with government stimulus programmes spurring expansion of 1.1 per cent. However, Japan's demand for oil has been falling in recent months, as consumers and industry continue to shift to other forms of energy.
Holidays around the world are set to curb liquidity in oil markets today.
China's markets are closed this week for the Lunar New Year holiday, as are markets in South Korea, Taiwan, Hong Kong, Vietnam, Malaysia and Singapore. In the United States markets are closed for Presidents' Day.