BLBG: Oil Rises Above $60 to a 6-Month High as Chinese Imports Surge
Oil rose above $60 a barrel for the first time in six months after China, the world’s second biggest energy-consuming country, increased crude imports by 14 percent in April.
Deliveries reached 16.17 million metric tons last month, or 3.9 million barrels a day, a statement on the Chinese customs department’s Web site showed today. The dollar fell to the lowest level against the euro since March on signs the worst of the recession may be over. A weaker U.S. currency bolsters demand for commodities as an alternative investment.
“The Chinese numbers are pretty stunning,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “The Chinese are looking at prices now as a good value and they are worried about all of the dollar assets they have. They are buying everything, any raw material they can get their hands on.”
Crude oil for June delivery rose $1.27, or 2.2 percent, to $59.77 a barrel at 9:01 a.m. on the New York Mercantile Exchange. Futures touched $60.08, the highest since Nov. 11.
China will increase imports of commodities including oil and boost inventories of strategic raw materials as prices are at their lowest in seven years, the nation’s economic planner said in March.
The dollar declined 0.6 percent to $1.366 per euro, from $1.3582 yesterday. It touched $1.3707, the weakest level since March 23.
Oil prices are up 34 percent this year, supported by record production cuts announced by the Organization of Petroleum Exporting Countries. OPEC ministers are scheduled to discuss output levels at a May 28 gathering in Vienna.
‘Too Early’
“It’s too early to say” what decision the group will make at its next meeting, Qatari Oil Minister Abdullah bin Hamad Al- Attiyah said at the opening of the South Hook liquefied natural gas terminal in Wales.
U.S. crude stockpiles remain at the highest since 1990 and probably gained 1 million barrels last week, according to the median of 13 responses in a Bloomberg News survey. Supplies rose to 375.3 million barrels in the week ended May 1, the highest since September 1990, the Energy Department said.
Brent crude oil for June settlement rose $1.13, or 2 percent, to $58.61 a barrel on London’s ICE Futures Europe exchange. The contract climbed as much as $1.43, or 2.5 percent, to $58.91, the highest since Nov. 10.
