Oil Slips Below $124 On Chinese News

Tuesday oil eased below $124 a barrel as a year-on-year fall in China's April oil imports, the first time in 18 months, raised questions over demand in the world's second largest oil consumer.

U.S. light crude for the delivery in June was down 65 cents at $123.58 a barrel by 0247 GMT, having settled a hefty $1.73 lower on Monday after a new intraday record high of $126.40.

London Brent crude was down 47 cents to $122.44.

China's April crude oil imports fell by 3.9 percent from a year ago to 3.47 million barrels per day (bpd), and were also down from March's record 4.07 million bpd imports, according to official Chinese data.

The market has kept a close watch on oil demand in China and India, whose economic booms have helped send prices up six-fold since 2002.

But analysts said the dip may just be a one-off adjustment as refiners ran down stocks after unusually high March purchases.

Following quick growth in the first quarter, year-to-date imports are still up 9.8 percent on a year earlier.

Supply disruptions in the North Sea and a weak dollar helped push oil prices up by more than 10 percent since the beginning of the month, while a still weak dollar has sent investors scurrying for dollar-denominated commodities such as oil.

Weekly U.S. inventory data to be released on Wednesday will provide further direction to the market after an unexpected fall in distillates stocks, which include heating oil and diesel fuel, pushed prices to new highs last week.

U.S. crude oil inventories are expected to have risen for a fourth straight week, by an average 1.9 million barrels on an up tick in imports, while products stocks would also be up, helped by an increase in refinery utilization, according to a preliminary Reuters poll of analysts on Monday.