BLBG:Brent Oil Rises to Three-Month High on Signs of Chinese Growth
Oil rose to its highest level in almost three months in London after China’s exports gained more than forecast in December, while crude imports climbed last year in the nation, the world’s second-largest fuel consumer.
Brent futures advanced as much as 1.1 percent to the highest since Oct. 19 after China’s customs agency reported overseas sales jumped 14 percent in December from a year earlier, exceeding the 5 percent median forecast in a Bloomberg News survey. The nation imported 271 million metric tons of crude last year, 6.8 percent more than a year earlier, according to the Beijing-based General Administration of Customs. Oil also gained amid forecasts for freezing weather in Europe.
“China and colder weather are driving the market up, with the latest Chinese data allaying concerns of a hard landing,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who predicts Brent crude may advance to $115 a barrel this month.
Brent for February settlement on the London-based ICE Futures Europe exchange rose as much as $1.24 to $113 a barrel. It was at $112.95 as of 10:07 a.m. local time. The European benchmark was at a premium of $18.64 to the U.S. benchmark, West Texas Intermediate, down from $18.66 yesterday.
WTI Crude for February delivery advanced as much as $1.43 to $94.53 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Sept. 19. Prices lost 7.1 percent in 2012 after three years of gains.
China Trade
A rebound in China’s trade may give policy makers more time to shift the economy toward domestic consumption to sustain expansion. Growth cooled to an estimated 13-year low in 2012 as Europe’s debt crisis crimped demand for Chinese goods.
“This is positive for commodities including oil demand,” said Jeremy Friesen, a commodity strategist at Societe Generale SA in Hong Kong. “We continue to see outperformance for China through the first quarter as this cyclical recovery continues, but improved external demand would add to this bullishness.”
China’s crude imports increased at a faster rate last year than in 2011, while its daily net purchases in December were the fourth-highest in 2012.
WTI has technical resistance along its 50-week moving average around $93.70 a barrel, according to data compiled by Bloomberg. Price advances have stalled near this indicator the past two days. Crude’s 14-day relative strength index also remains close to 70, a level that would signal further gains may not be sustainable.
Low Temperatures
Low temperatures in Frankfurt are forecast to drop to minus 9 degrees Celsius (16 Fahrenheit) on Jan. 16, from 4 degrees today, according to CustomWeather Inc. data on Bloomberg. Germany is Europe’s largest heating oil market.
Gasoil for January delivery, which expires today, rose $9, or 1 percent, to $957.50 a ton on the ICE exchange. It was as high as $964.75, the highest since Oct. 31.
Oil fell yesterday after the Energy Department report showed U.S. crude inventories rose 1.3 million barrels last week. U.S. gasoline stockpiles climbed for a seventh week to 233 million barrels, the highest since February 2011. Distillate supplies increased 6.8 million barrels, the most since May 1997, versus a forecast gain of 1.9 million.
Crude stockpiles at Cushing, Oklahoma, the delivery point for the WTI contract, were up for a fifth week to a record 50 million barrels, according to the Energy Department’s data.
“Inventories have been elevated for some time,” said David Lennox, an analyst at Fat Prophets in Sydney. “There might be a modest recovery in demand in the U.S. China will put further pressure on the demand side this year.”
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
