Bank of China rate hike jars oil

Dec. 27, 2010 at 6:55 PM
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NEW YORK, Dec. 27 (UPI) -- Oil prices settled under $91 per barrel Monday after the People's Bank of China said it would raise interest rates to cool its rate of inflation.

The central bank in Beijing said it would raise its benchmark rate 0.25 percentage points, lifting the one-year lending rate to 5.81 percent.

Sunday's move marked the second rate increase in a little more than two months. The bank last raised rates Oct. 20.

The move applied the brakes to a recent run-up on energy prices. February delivery light sweet crude oil on the New York Mercantile Exchange shed 58 cents to $90.93 per barrel. Heating oil prices lost 3 cents to $2.5108 per gallon. Reformulated blendstock gasoline prices lost 2.82 cents to $2.4144 per gallon.

Henry Hub natural gas prices added 1.7 cents to $4.10 per million British thermal units.

At the pump, the national average price of unleaded gasoline reached $3.042 per gallon from Sunday's $3.04, AAA said.

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