08 May 2014, News Wires – Brent crude hovered around $108 a barrel on Thursday, holding onto most of the gains from the previous session as customs data showed a large jump in Chinese crude imports and a bigger than expected trade surplus in the world’s second biggest oil user.
China’s crude imports rose 22.4% in April from March, the data showed, while total exports rose slightly against forecasts for a decline, offering some rare good news this year for the slowing economy.
“People have been bearish on China, so if we have any good news out of China it should at least provide some support,” said Tony Nunan, oil risk manager at Mitsubishi in Tokyo.
Brent crude was down 12 cents at $108.01 per barrel early on Thursday, after settling $1.07 higher on Wednesday.
US crude was 8 cents higher at $100.85 per barrel. The contract had gained $1.27 in the previous session.
China’s crude imports rose to 6.78 million barrels per day in April, after slipping below 6 million bpd in March for the first time since November last year. Imports through April for the year were up 11.5% from a year ago.
Exports rose 0.9% in April, while imports rose 0.8%, leaving the country with a trade surplus of $18.5 billion for the month, against expectations of a trade surplus of $13.9 billion.
“We’ve seen a lot of negative headlines about China, but as long they can show a decent growth … it’s supportive for the oil market,” Nunan said.
Oil benchmarks rose by more than $1 on both sides of the Atlantic after data from the US Energy Information Administration (EIA) showed an unexpected drop in inventories last week.
Total stocks fell 1.8 million barrels last week, according to the EIA, compared with analyst’ forecasts for a 1.4-million-barrel build. Stocks fell 1.4 million barrels at Cushing, Oklahoma, delivery point for the US futures contract, their lowest since 2008.
Dealing a blow to efforts to restore vital oil exports from Libya and contributing further support to global oil prices, rebels occupying major oil ports in the east said on Wednesday they would boycott Prime Minister Ahmed Maiteeq and keep two major export terminals shut for now.
Optimism about higher Libyan exports had helped to put pressure on oil prices since the end of last month when oil ports shut since last year were reopened.
But Libyan oil production remains at just over 250,000 bpd, well down from around 1.4 million bpd in mid-2013.
Russian President Vladimir Putin called on pro-Moscow separatists in Ukraine to postpone a vote on secession just five days before it was to be held, potentially pulling Ukraine back from the brink of violent dismemberment.
Brent could come under pressure if Putin is serious about defusing the conflict.
“It looks like geopolitical risk will keep support under the market, but at the same time the market is oversupplied. So I think we’ll just be going sideways for a while,” said Nunan.