Oil prices rose almost two per cent on Friday, as Chinese crude demand rises, according to a Reuters report
The news agency revealed that US prices fell 1.7 per cent on the week and Brent prices fell 0.5 per cent amidst growing concerns that rising US production could affect OPEC-led supply cuts
Brent crude settled up US$1.20 or 1.9 per cent at US US$63.40 a barrel.
China’s crude oil imports rose to 9.01mn barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed.
“We have good numbers out of China,” said John Macaluso, an analyst at Tyche Capital Advisors, noted Reuters. “A lot of the extra imports are not from Saudi Arabia. Iran, Russia and the U.S. are some of the countries picking up the slack.”
The news agency reported that increasing demand will push China ahead of the United States as the world’s biggest crude importer this year.
“Generally speaking, the market is looking more healthy than sick,” said Tamas Varga, analyst with PVM Oil Associates.
Varga said the threat of a strike later this month from a union in Nigeria, Africa’s largest oil exporter, was supportive. An extension to the end of 2018 of production cuts by the Organisation of the Petroleum Exporting Countries, Russia and other producers underpinned the market.
The output cuts have led to oil prices being higher between June and October, with Brent gaining around 40 per cent.
“Even if you have no bullish view ... OPEC and Russia have taken away the risk to the downside,” said Bjarne Schieldrop, chief commodities analyst with SEB Bank, adding it was unlikely that Brent would drop below US$61 per barrel.
