Oil market enjoys China-inspired gains

16th July 2014, Comments 0 comments

Global oil prices rebounded Wednesday as traders seized on news of stronger-than-expected economic growth in top energy consumer China.

Brent North Sea for delivery in August rose 33 cents to $106.35 a barrel in London early afternoon deals.

New York's benchmark West Texas Intermediate for August gained 75 cents to $100.71 per barrel from Tuesday's closing level.

"Robust Chinese economic data offered some support to the oil market ... today, increasing hopes about a rebound of Asian oil demand," said Sucden analyst Myrto Sokou.

The market also gained ground on bargain-hunting after the previous day's sharp losses that were stoked by easing Middle East supply concerns.

Singapore's United Overseas Bank said prices remained under pressure "as investors eased up on worries about Iraq supply disruptions while there were indications that Libya's oil production is returning".

Iraq's sharply divided parliament elected a speaker Tuesday in a step forward in the delayed government formation process, while a renewed bid to recapture Tikrit from a jihadist-led militant offensive ended in retreat.

The offensive has not reached southern Iraq, home to the bulk of the country's oil industry, however.

Prospects of a revival in Libyan crude exports to a global market already flush with supplies also capped prices, as investors brushed aside reports of fresh violence in the North African state on Sunday.

Libya's interim Prime Minister Abdullah Al-Thani declared this month that authorities had regained control of two export terminals blockaded by rebels demanding autonomy in the country's eastern region.

The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts say.

Dealers are also eyeing the latest US supply report out later Wednesday for clues about demand in the world's top crude consumer in the middle of the summer driving season.

Crude reserves are expected to have fallen 2.6 million barrels in the week to July 11, according to analysts polled by the Wall Street Journal.

A decline in inventories typically indicates strong demand, sending prices higher.

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© 2014 AFP

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