BR:Brent edges higher toward $109 on strong China trade data
SINGAPORE: Brent crude edged higher toward $109 a barrel on Wednesday after data showed Chinese oil imports hit a record high last month, raising hopes of continued growth in oil demand in the world's second largest economy.
Crude oil imports in the world's biggest net oil importer rose 11.9 percent in January from a year earlier to a record 28.16 million tonnes, or 6.63 million barrels per day (bpd), customs data showed Wednesday.
Also signalling a reversal of the recent economic slowdown in China, exports beat expectations, rising 10.6 percent in January from a year earlier, while imports jumped 10 percent.
"The strong data underpins strength in oil markets and across the whole commodity board," said Mark Keenan, head of commodities research in Asia at Societe Generale.
"The data is so surprising that there's an element of checking whether it's in fact correct at the moment." Brent crude for March delivery was 13 cents higher at $108.81 at 0426 GMT, after settling up five cents. US crude was up 57 cents at $100.51 a barrel, after closing 12 cents lower.
The US contract was buoyed by data from the American Petroleum Institute (API) showing crude stocks at the key US delivery hub in Cushing, Oklahoma fell by 2.5 million barrels in the week to Feb. 7.
Expectations of increased demand due to cold weather in the United States, especially for distillates, also offered support.
Distillates, including heating oil and diesel, fell by 1.5 million barrels last week, the API data showed.
US crude inventories rose by 2.1 million barrels to 362.9 million, the API data showed, although this was lower than analysts' expectations. The more closely-watched weekly inventory report from the US Energy Information Administration (EIA) is due at 1530 GMT.
Strong growth in Chinese crude imports last month came as PetroChina and Sinopec started operations at the 300,000-bpd Sichuan refinery and the 280,000-bpd Fujian refinery. "Aside from seasonal stockpiling ahead of the Chinese New Year, the January startup of two new refineries in Sichuan and Fujian likely kept imports high," said Sijin Cheng, analyst at Barclays in Singapore.
An imminent startup of a new strategic petroleum reserve site in Huangdao, designed to hold 18.9 million barrels, may have been a factor as well, she added.
