Oil prices fell to near $90 a barrel Thursday as Chinese inflation figures suggested authorities need to do more to slow growth and investors awaited a weekly report on U.S. crude inventories.
By early afternoon in Europe, benchmark crude for February delivery was down 46 cents at $90.40 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 52 cents to settle at $90.86 on Wednesday.
The February contract expires later Thursday, while the more heavily traded March contract was down 54 cents to $91.27.
China's latest figures on economic growth and inflation put a dampener on Asian stock markets, with analysts saying Beijing may need to slow the world's No. 2 economy more aggressively to tame price increases. That could dent China's appetite for crude and other commodities.
The extent of new moves to slow China's growth will be a "critical factor" for the oil market this year, energy consultants Cameron Hanover said in a report.
China's economy expanded 9.8 percent in the fourth quarter, up from 9.6 percent in July-September but cooling from the torrid 11.9 percent growth seen in the first quarter of last year. Inflation in December moderated to 4.6 percent from November's 28-month high but analysts said it was still more than expected and likely to rise again.
Traders are also looking to the Energy Department's inventory report for clues to the strength of demand for oil and other fuels.
The department is scheduled to release its weekly oil inventory report on Thursday, a day later than usual because of the Martin Luther King Jr. holiday on Monday. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expect a decline of 2.2 million barrels in crude supplies.
The numbers should reflect last week's temporary closure of the Trans-Alaskan pipeline due to a leak. The line delivers about 13 percent of the nation's daily domestic oil production to tankers for West Coast delivery.
While a weaker dollar usually helps drive up oil prices by making crude cheaper for investors holding other currencies, the correlation has been mostly absent in recent days.
"The oil market is struggling for direction," said a report from Sucden Financial in London. "The dollar is trading lower against the euro, but it failed to provide any support to the energy market."
In other Nymex trading in February contracts, heating oil fell 1.12 cents to $2.645 a gallon and gasoline slipped 2.21 cents to $2.4595 a gallon. Natural gas futures were unchanged at $4.561 per 1,000 cubic feet.
In London, Brent crude was down 56 cents at $97.60 a barrel on the ICE futures exchange.