Oil edges higher on upbeat Chinese growth data

18th October 2013, Comments 0 comments

Global oil prices rose Friday as upbeat Chinese economic growth data boosted energy demand hopes, but gains were capped by concerns over the deal to avert a disastrous US default.

New York's main contract, West Texas Intermediate (WTI) for delivery in November, advanced 83 cents to $101.50 a barrel.

Brent North Sea crude for December increased 93 cents to stand at $110.04 a barrel in London midday deals.

China, the world's biggest energy consumer and oil importer, said Friday that its economy expanded 7.8 percent year-on-year in July-September, snapping two quarters of slowing growth in the world's top energy consuming nation.

"Crude oil prices rebounded on Friday with Brent eyeing $110 per barrel following the robust Chinese economic data that showed the Chinese economy grew by 7.8 percent in Q3 2013, verifying hopes about a recovery in the oil demand from Asia," said Sucden brokers analyst Myrto Sokou.

"The solid Chinese economic indicators spread an optimistic tone for equities and commodities in today's trading session, as China's economic growth accelerated for the first time in three quarters."

However, oil price gains were limited by worries about developments in the United States, after a last-gasp temporary deal by lawmakers on Thursday averted a disastrous debt default by the world's biggest economy.

A bill passed by Congress and signed into law by President Barack Obama restarted government operations after a 16-day partial shutdown, and raises the country's debt ceiling until February 7.

Analysts warned that there are fears of another stand-off in Washington when that time is up.

"It seems that the Congress has put together a short-term budget and debt deal which will possibly cause further uncertainty and renewed discussions over the next three months," added Sokou.

The US government shutdown meanwhile prevented the publication of official weekly crude inventories data on Wednesday.

That switched the market focus onto the weekly data from the American Petroleum Institute (API), an industry body.

Prices had fallen on Thursday after the API reported an increase in US crude supplies, signalling weaker demand in the world's biggest oil consumer.

The trade group reported a sharp increase of 5.9 million barrels in US crude inventories in the week ending October 11.

The US government's Energy Information Administration said in a statement that it would resume its weekly stockpiles report -- a barometer for American energy demand -- on October 23.

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© 2013 AFP

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