Oil prices rise amid robust China demand

Singapore — Oil prices climbed on Tuesday as data from China showed the world’s second largest oil consumer’s import growth surging and on tensions in the Middle East after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites.

Brent crude oil futures were up 31c, or 0.5%, at $63.59 a barrel by 3.56am GMT while US crude oil futures gained 28c, or 0.5%, to $59.98 a barrel.

China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide Covid-19 vaccinations, while import growth surged to the highest in four years.

Crude oil imports in China jumped 21% in March from a low base of comparison a year earlier as refiners ramped up operation amid robust fuel demand as the Covid-19 pandemic eased.

“The data points to a domestic revival that could be good news for gasoline demand, and as such oil prices have moved higher post the release,” said Stephen Innes, chief global market strategist at Axi.

Also supporting prices, US crude oil stockpiles were expected to have dropped last week for a third straight week, while distillate and fuel inventories likely grew, a preliminary Reuters poll showed on Monday.

Still, US oil output from seven shale formations is expected to rise for a third straight month, climbing by about 13,000 barrels a day in May to 7.61-million, the US energy information administration said on Monday.

Yemen’s Iran-aligned Houthi movement said on Monday it had fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Saudi Aramco facilities in Jubail and Jeddah, though there was no immediate confirmation from Saudi.

The slow rate of vaccinations in Europe and anticipation of additional supply of oil from Iran in the coming months capped price gains.

“Crude prices are in a holding pattern as some advanced economies continue to make strides towards herd immunity, while some nations continue to struggle thwarting the virus spread,” said Edward Moya, senior market analyst at Oanda.

Reuters