WSJ:Oil Futures Rise in Asia on China's GDP Growth Data
By Eric Yep
Crude-oil futures moved into positive territory in Asian trade Monday after data showed China's economy grew in line with market expectations in the second quarter.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $106.15 a barrel at 0632 GMT, up $0.20 in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.14 to $108.95 a barrel.
China's gross domestic product in the second quarter grew by 7.5% on-year, slower than the 7.7% registered for the first quarter, but at par with the average forecast of 18 economists surveyed by Dow Jones Newswires.
However, China's industrial output in June disappointed, growing at 8.9% on-year compared to a forecast of 9.1%.
"There was a minor sense of relief attached to the Chinese GDP result today, despite the result being in line with expectations," Tim Waterer, senior trader at CMC Markets said in a note to clients.
He said some market participants expected weaker numbers and the GDP data "offered mild comfort to risk assets."
Slowing growth in China, the world's second-largest consumer of oil after the U.S., and its impact on oil demand and prices is a major cause of concern for oil markets.
Last month, the U.S. Energy Information Administration trimmed its 2013 oil-demand growth outlook for China to 4.1%, from an earlier growth forecast of 4.4%. This was followed by another cut in China's oil demand growth by the International Energy Agency.
Macro headwinds, tighter credit conditions and slower growth could see China's oil demand expectations surprise to the downside, Citigroup said in a note to clients.
"The fourth quarter should provide a seasonal lift in demand but risks are skewed to the downside," the house said, adding that it was keeping its Brent crude oil price forecast for the third quarter unchanged at $105/bbl and for the fourth quarter at $100/bbl, despite bullish developments in the last few weeks.
Crude oil prices are supported by political unrest in Egypt and supply disruptions in Libya and the North Sea.
Later this week, markets will shift focus to U.S. Federal Reserve Chairman Ben Bernanke's testimony on the economy before Congress.
Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--fell 41 points to $3.1134 a gallon, while August heating oil traded at $3.0322, 28 points higher.
ICE gasoil for August changed hands at $916.50 a metric ton, up $0.25 from Friday's settlement.
