Oil prices rally on Chinese data

10th November 2014, Comments 0 comments

World oil prices rose Monday, gaining strength from solid economic data in key consumer China, with extra support from the weaker US dollar, dealers said.

Brent North Sea crude for delivery in December jumped $1.

45 to trade at $84.

84 a barrel around midday in London.

US benchmark West Texas Intermediate for December rallied $1.

06 to $79.

71 a barrel compared with Friday's closing level.

"Brent .

futures rallied towards $85 per barrel, supported by solid Chinese economic data which suggested improving market conditions in China," said analyst Myrto Sokou at the Sucden brokerage in London.

"WTI front month futures climbed towards the key level of $80 per barrel, supported by a softer US dollar along with the firm Chinese data.

"Chinese inflation was unchanged at a near five-year low of 1.

6 percent in October from the previous month, official data showed.

At the same time, figures released Saturday indicated a further slowdown in growth of exports and imports last month.

Exports expanded 11.

6 percent year-on-year, compared with 15.

3 percent in September, while imports rose 4.

6 percent, down from 7.

0 percent.

"Crude oil (prices) have kicked off the new trading week building on the gains that was seen on Friday," said Saxo Bank analyst Ole Hansen.

"China's trade balance in October was better than expected with exports rising by more than expected.

"He added that the data was "easing concerns about the demand outlook" from Asian powerhouse China.

However, the data will give the central People's Bank of China some room to fine-tune monetary policy to kickstart economic growth, which stood at 7.

7 percent last year -- its slowest pace in more than a decade.

The oil market had climbed on Friday as traders took a breather after a turbulent week that saw sharp sell-offs and a mixed US jobs report.

The US Labor Department said the economy added 214,000 jobs last month, marking the ninth straight month of growth above 200,000 despite missing the 235,000 consensus analyst estimate.

The unemployment rate slipped to a six-year low of 5.

9 percent in the United States, which is the world's biggest consumer of crude.

Desmond Chua, analyst at CMC Markets, said the data raised investor optimism as it "underlined persistent jobs growth in the US".

Elsewhere, dealers are closely monitoring the situation in rebel-held east Ukraine, following reports Sunday of Russian military reinforcements there that has raised fears of a return to all-out fighting in violation of a ceasefire agreement with Kiev.

Russia has denied being involved in the Ukrainian civil strife, but openly gives the pro-Kremlin rebels political and humanitarian backing.

Russia is one of the world's top oil producers and Ukraine is a major conduit for Russian natural gas exports to Europe.


© 2014 AFP

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