* U.S. refinery activity plunges
* China beats 2009 growth target after strong Q4
(Updates prices, recasts and adds details)
By David Sheppard
LONDON, Jan 21 (Reuters) - Oil fell by more than $1 to move
towards $76 a barrel for the first time this year, as strength
in the dollar and weak demand saw crude extend recent losses.
The U.S. Department of Energy reported crude oil inventories
dipped by 400,000 barrels to 330.6 million barrels in its weekly
snapshot of fuel stocks in the world's largest energy consumer.
While expectations in the market had been for crude stocks
to rise, many analysts and traders said the headline figure was
a steep drop in refinery utilisation. []
"You really have to focus on the refinery rates dropping
sharply -- it seems that refineries are loath to produce
product," OptionsExpress analyst Mike Zarembski said.
"Until we get refinery rates up it looks like crude oil
demand is just lacklustre. The whole trend in commodities is
down and that is the way traders are looking at this report
right now."
Weak demand during the still fragile economic recovery has
seen refiners rapidly scale back activity to try and underpin
profit margins. Refinery activity is now at just 78.4 percent of
capacity, having fallen by almost 3 percent last week.
U.S. crude oil for March delivery <CLc1>, the new
front-month contract, fell 96 cents to $76.78 a barrel by 1429
GMT, having earlier hit a low of $76.33.
London Brent crude <LCOc1> fell 6 cents to $76.26.
Prices tooks some support from a drop in U.S distillate
stocks, which include diesel and heating oil. The DoE said they
declined by 3.3 million barrels last week to 157.1 million
barrels.
Gasoline stocks rose by 3.9 million barrels to 227.4 million
barrels.
DOLLAR DENTS COMMODITIES
The dollar's jump to a five-month high against the euro also
pressured commodities on Thursday. Commodities priced in the
greenback tend to fall as the dollar rises as they become more
expensive for holders of other currencies. []
Prices were also weighed down by concerns China will take
further measures to temper its booming economy after it posted
double-digit growth in the fourth quarterfor the first time
since 2008. []
China's annual gross domestic product growth accelerated in
the fourth quarter to 10.7 percent -- the fastest in two years
-- from a revised 9.1 percent in the third, the National Bureau
of Statistics (NBS) said on Thursday. []
For all of 2009, China grew 8.7 percent.
http://graphics.thomsonreuters.com/0110/CN_GDP0110.gif
"Investors will soon have to assess whether this report --
and others like it -- will be strong enough to allow the
commodity rally to continue without alarming the authorities
even further," MF Global analyst Edward Meir said.
World growth could falter as governments pull back some of
the extraordinary liquidity they pumped into markets, the World
Bank said on Wednesday. []
The Chinese government has signalled it will tighten credit
in 2010, calling on banks to increase reserves and curb lending.
U.S. crude reached a 15-month high of $83.95 a barrel on
Jan. 11. Prices are 47 percent below their July 2008 record high
near $150, but have more than doubled from lows near $32 reached
by the end of that year.
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by Keiron Henderson)
