NEW YORK, United States

Oil prices fell yesterday after China increased key interest rates to help slow inflation in its growing economy. That raised concerns that the country’s thirst for oil would diminish as well.

West Texas Intermediate crude, or WTI, for March delivery lost 54 cents to settle at US$86.88 a barrel on the New York Mercantile Exchange. In London, Brent crude rose 65 cents to settle at US$100.52 per barrel on the ICE Futures exchange.

Investors appeared to be more concerned about China than the ongoing anti-government demonstrations and strikes in Egypt. About 3,000 support workers at the Suez Canal demonstrated for better wages and working conditions, but operations at the canal continued uninterrupted.

China’s central bank raised interest rates for the third time since October to rein in inflation. The country’s inflation rate hit a 28-month high of 5.1 per cent in November before moderating in December. Government leaders fear a sharp rise in prices for things like food and fuel could trigger unrest.

China is the second-largest energy consumer in the world, after the US China’s so-called “apparent oil demand” jumped 11.43 per cent to a record 434.4 million metric tons in 2010 from the previous year, according to Platts, the energy information arm of McGraw-Hill Cos.

The figure is based on refinery and net oil product import data as reported by the National Bureau of Statistics and Chinese customs, Platts said. The Chinese government doesn’t release actual oil consumption data.