09 June 2014, News Wires – Brent crude rose above $109 a barrel on Monday as strong Chinese and US data pointed to healthy economic growth and higher demand for oil from the world’s top two consumers, Reuters reported.
That added support to a market already bolstered by the loss of crude exports from Libya, where violence and civil turmoil have cut oil output by more than 1 million barrels per day from pre-unrest levels, according to the news wire.
The Ukraine crisis is also a worry for markets in the West that rely heavily on oil and gas exports from Russia.
Brent was up $0.90 at $109.51 a barrel by 1:15 GMT, after settling down $0.18 and declining 0.7% last week. US oil rose $1.04 to a high of $103.70, extending gains after ending $0.18 up on Friday,” Reuters reported.
“Good overall economic data …are supporting oil,” Tetsu Emori, a commodity fund manager at Astmax Investment, told the news wire. “And we have had geopolitical worries (too).”
China, the world’s largest consumer of energy, imported 26.08 million tonnes, or 6.14 million bpd, of crude oil in May, bringing total shipments in the first five months of this year to 128.7 million tonnes.
Some of China’s oil appears to have been going into storage.
China’s slackening economy, set to grow at its slowest pace in 23 years, has blunted its oil demand, which dropped to a seven-month low in April, as refineries scaled back production for maintenance and exported surplus fuel.
“Imports so far were more affected by state stockpiling, as China brings a number of new strategic petroleum reserves sites online,” Sijin Cheng, an analyst at Barclays, said in a note.
Opec meets in Vienna this week and is likely to keep an output target of 30 million bpd, Reuters said. Members of the cartel, which pumps a third of the world’s oil, are happy with oil prices and producing enough to cover most of their budget needs.