Oil prices get lift from fall in US crude stocks, China export data
OIL prices went up for the first time in eight days yesterday as positive Chinese trade data and an unexpected drop in weekly United States crude-oil inventories gave investors reasons to buy crude futures.
Brent crude, the global benchmark, rose 63 US cents to US$31.49 a barrel in early trade but remained near lows last seen nearly 12 years ago.
US West Texas Intermediate crude was up 69 US cents at US$31.13 a barrel, recovering from Tuesday's dip below US$30.
"The American Petroleum Institute (API) inventory data triggered a profit-taking wave, that's the main reason for this uptick," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
"But the overall sentiment is still negative, meaning downside risk is still greater than upside potential."
US crude stocks fell unexpectedly last week, data from industry group API showed on Tuesday. Inventories fell by 3.9 million barrels in the week to 480.071 million, compared with analysts' expectations for a rise of 2.5 million barrels.
Crude stocks at the Cushing, Oklahoma delivery hub fell by 302,000 barrels, the API said.
China reported exports dipped just 1.4 per cent in US dollar terms last month, compared with forecasts of an 8 per cent drop, positively surprising world markets.
The world's second-biggest oil consumer has also been taking advantage of the price rout to stock reserves and boost exports of refined products, and may be set to overtake the US as the world's largest importer.
But the bearish outlook for oil remains.
Analysts at Morgan Stanley warned yesterday that a rise in demand for crude could be lower than previously expected.
"Any slowing in the rate of demand growth could delay the timing of rebalancing and ultimately a price recovery," they said in a research note.
The potential for the calling of an emergency Opec meeting also weakened yesterday when Iran's oil minister was quoted as saying he had not received any request for such a gathering.
Nigeria's oil minister said on Tuesday that a "couple" of Opec members had asked for an emergency meeting.