US oil on the rise

China-economy10 June 2014, News Wires – US crude rose by nearly $2 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.

China’s exports beat forecasts in May on firmer global demand, rising 7% from a year earlier and quickening from April’s increase of 0.9%, Reuters reported.

The strong gains overshadowed an unexpected fall in imports that could signal weaker domestic demand, the news wire said.

US oil rose by $1.75 a barrel to settle at $104.41.

Market watchers said US crude’s outperformance, in the absence of any clear change in the fundamental picture, could not be sufficiently explained by the Chinese data.

“Don’t let anyone tell you it’s China, or US payrolls,” Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania, told the news wire.

“Something’s happening and we don’t know what it is.”

Brent rose by $1.38 a barrel to settle at $109.99, after settling down 18 cents and declining 0.7% last week.

The spread between the two benchmarks settled at $5.58, after swinging between $5.25 and $6.15 during Monday’s session.

The positive data boosted an oil 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.

The Chinese data followed US figures from Friday showing employment returning to its pre-recession peak, confirming steady improvement in the world’s top economy.

Opec meets in Vienna this week and is likely to keep an output target of 30 million bpd.

Members of the group, which pumps a third of the world’s oil, are happy with oil prices and producing enough to cover most of their budget needs.

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