Oil Futures Rise on Positive U.S., China Economic Data
WASHINGTON – Oil futures were higher in Asian hours Monday as investors cheered positive economic data out of the world’s two largest economies, the U.S. and China, while the lack of a resolution in nuclear talks with Iran also provided support.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $94.74 a barrel at 0625 GMT, up $0.14 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange rose $0.24 to $105.36 a barrel.
“U.S. payrolls and third-quarter GDP outperformed expectations, lifting sentiment, as this fuels expectations about demand in the world’s largest crude-oil consuming country,” said Singapore-based Phillip Futures analyst Tan Chee Tat.
Data Friday showed that the U.S. added 204,000 jobs in October, much higher than a forecast of 120,000 new jobs. The U.S. economy expanded at an annual rate of 2.8% in the third quarter, the Commerce Department said Thursday. Economists polled by MarketWatch had forecast 2.3% growth.
The good news spilled across the Pacific to China, which released economic data Saturday that provided further evidence of a steady recovery from a slowdown earlier in the year as industrial production grew by 10.3% on year in October.
The positivity over China’s figures came despite a decline in October crude-oil imports, which fell to 20.41 million metric tons, preliminary data from the General Administration of Customs showed Friday. This a 14% decline from a year earlier and 5.3 million tons below September levels.
“A restocking of crude over the late summer and a seasonal slowing in crude processing weighed on October imports,” said Morgan Stanley Research in a note.
“Demand and imports are likely to recover into year-end as distillate demand recovers in winter. However, the pace of import growth may be tempered by weak refinery margins, higher crude stocks and the risk of overbuilding products once again.”
Phillip Futures’ Mr. Tan said Nymex crude-oil price gains are likely to extend this week as U.S. refineries emerge from seasonal maintenance. Weekly Energy Information Administration data to be released Wednesday will provide greater clarity, he added.
There is also supportive news from Europe as talks among Iran and six world powers to freeze Tehran’s nuclear program ended without a resolution, putting paid to hopes that oil sanctions against the Middle Eastern country would be lifted soon.
Nymex reformulated gasoline blendstock for December–the benchmark gasoline contract–rose 71 points to $2.5605 a gallon, while December heating oil traded at $2.8792, 73 points higher.
ICE gasoil for November changed hands at $899.75 a metric ton, up $6.75 from Friday’s settlement.
– WALL STREET JOURNAL