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Brent Crude Rises To $64.74pb On Strong China Data

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Oil prices edged up yesterday after posting two days of declines at the start of the week. Support came from a report that the U.S. crude inventories are not rising as much as expected during the spring season now starting, implying healthy demand, and from strong China data. U.S. West Texas Intermediate, WTI,  crude futures were at $60.84 a barrel up 13 cents, or 0.2 percent, from their previous close, just as Brent crude futures were at $64.74 per barrel, up 10 cents, or 0.15 per cent. U.S. crude inventories rose by 1.2 million barrels in the week to March 9, to 428 million barrels, the American Petroleum Institute said on Tuesday.

That compared with analysts’ expectations for an increase of 2 million barrels. Support also came from China, where January-February domestic crude oil production fell 1.9 percent on the year to 30.37 million tonnes, equivalent to 3.77 million barrels per day (bpd), according to data from the National Statistical Bureau yesterday. At the same time, crude oil throughput rose 7.3 percent to 93.4 million tonnes, implying a need for more imports. China’s industrial output grew 7.2 percent in the first two months of the year compared with the same period last year, beating expectations of a 6.1 percent hike. Despite this, oil markets remain relatively weak. Prices have not returned to their January highs of over $70 per barrel for Brent and almost $67 for WTI. Meanwhile, estimates by the EIA show global supplies will exceed 100 million bpd for the first time in the second quarter of 2018, while demand will only break through that level in the third quarter, implying a slightly oversupplied market. That would be a reversal from a supply deficit in 2017 and early 2018.



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