BL:Brent crude rebounds sharply, mainly on China’s positive industrial output
Balkan Business News Correspondent - 14.06.2011
Brent crude rebounded sharply Tuesday mainly on world’s second largest oil consumer China’s positive industrial output while WTI crude dropped further in New York.
London’s Brent crude was seen trading at $119.30 a barrel at 12.00 noon Singapore time while WTI crude for July was at $97.15 a barrel at the same time, Widening its premium to U.S. crude benchmark West Texas Intermediate (WTI) to a record of more than $22 a barrel
Analysts said China’s positive data helped ease concerns over economic recovery and expected to boost energy demand .
China's May industrial output jumped 13.3 percent from a year earlier, topping forecasts for a 13.2 percent gain while consumer price inflation accelerated to a 34-month high.
Brent had fallen as much as 0.5 percent before the release of the Chinese data on prospects of lower European oil demand after rating agency Standard & Poor downgraded Greece to the lowest-rated country in the world.
Although the oil market read China's higher-than-expected industrial output as positive, the pace of growth was the slowest since November and underlined other data suggesting the world's second-biggest economy is slowing down.
China's money growth slowed to a 30-month low in May and banks extended fewer new loans than expected as monetary policy weighed on bank lending.
However, WTI crude continued its journey towards south mainly due to weaker fundamentals in the US and the restoration of the Keystone pipeline, which delivers crude from Canada to the United States.
Analysts said investors and traders are looking for more clues from Today’s American Petroleum Institute data followed by government statistics from the U.S. Energy Information Administration on Wednesday.
On Monday, oil dropped sharply as New York's main contract, light sweet crude for delivery in July, known as West Texas Intermediate, fell $1.99 to $97.30 a barrel.
In London, Brent North Sea crude for July rose 32 cents to $119.10 a barrel, marking a record spread of nearly $22 between the prices of the two benchmark contracts.
