Oil prices plunge as China's growth slows

Oil prices dropped sharply Monday as China's growth rate was weaker than market expectations.

The growth of China's gross domestic product unexpectedly slowed to 7.7 percent in the first quarter, down from 7.9 percent during the fourth quarter of 2012, the National Bureau of Statistics reported Monday.

According to preliminary statistics, the GDP of China totaled 11.89 trillion yuan ($1.89 trillion) in the first three months of the year.

The growth rate of China was weaker than market expectations, but still stayed above the 7.5-percent full-year target for 2013 set by the government last month. The weak economic data from China raised concerns about the possible slowdown of the country's demand for oil.

Downbeat economic news also came from the United States. The general business conditions index of New York State fell to 3.1 in April from 9.2 in March, missing market expectation.

Traders concerned that the US Federal Reserve might tighten the stimulus program earlier than planned as some Fed officials have recently even called for an early end to the bond-buying program. If that happens, the US interest rate would rise, along with the appreciation of the US dollar. Stronger greenback will make the dollar-priced oil less attractive.

Light, sweet crude for May delivery dropped $2.58, or 2. 82 percent, to settle at $88.71 a barrel on the New York Mercantile Exchange.

Brent for May delivery expired on Monday. The more actively traded June contract was down $2.6, or 2.5 percent, to close at $100.44 a barrel.