Bloomberg: Oil rose from the lowest level in three weeks in New York after China’s crude processing climbed to a record and industrial output beat estimates. OPEC meets in Vienna this week to discuss its production quota. Bloomberg
By Ben Sharples
Oil rose from the lowest level in three weeks in New York after China’s crude processing climbed to a record and industrial output beat estimates. OPEC meets in Vienna this week to discuss its production quota.
Futures advanced as much as 0.6 percent after falling the past four days. China’s refining increased 9.1 percent in November from a year ago to 10.2 million barrels a day and industrial production jumped 10.1 percent, the National Bureau of Statistics in Beijing said yesterday. Oil briefly pared gains after customs data today showed China’s exports rose less than estimated. Saudi Arabia is content with current crude prices, the country’s oil minister said before the Organization of Petroleum Exporting Countries meets on Dec. 12.
“It’s encouraging to see further evidence that the Chinese economy is bottoming out and looks as though it can, at least in the medium term, sustain growth rates in the 7.5 percent to 8.5 percent region,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The most likely outcome is that OPEC’s production quota will be left at 30 million barrels a day.”
Crude for January delivery rose as much as 52 cents to $86.45 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.27 at 3:48 p.m. Singapore time. The contract dropped 33 cents on Dec. 7 to $85.93, the lowest close since Nov. 15. Prices slid 3.4 percent last week and are down 13 percent this year.
Brent oil for January settlement on the London-based ICE Futures Europe exchange climbed as much as 68 cents, or 0.6 percent, to $107.70 a barrel. The European benchmark crude was at a premium of $21.14 to New York-traded West Texas Intermediate grade. The spread widened on Dec. 7 for the first time in seven days to $21.09.
Uptrend Chart
Oil is rebounding in New York after settling for a second day above technical support along an upward-sloping trend line, according to data compiled by Bloomberg. This line, connecting the lows of June and November, is around $85.60 a barrel today. Buy orders tend to be clustered near chart-support levels.
Retail sales in China, the world’s second-biggest crude consumer, increased 14.9 percent last month from a year ago, the statistics bureau also said yesterday. Economists surveyed by Bloomberg forecast industrial production would gain 9.8 percent and retail sales would climb 14.6 percent.
China’s exports rose 2.9 percent in November, compared with a median estimate of 9 percent, data from the customs administration in Beijing showed today.
OPEC Supply
OPEC will probably maintain its production quota at 30 million barrels a day of oil, according to a Bloomberg News survey of 18 analysts. “Prices are fine and customers are happy,” Saudi Arabia’s Petroleum Minister Ali Al-Naimi said in an interview on Dec. 7.
The kingdom is the largest producer in the 12-member group, which pumps about 40 percent of the world’s crude.
“The Saudis don’t want prices to go up much from here,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said yesterday. “Some members like Iran may want a cut in production, but the oil price is still healthy so it’s difficult for OPEC members to claim there’s oversupply.”
Hedge-fund managers and other large speculators boosted their bets oil prices will rise, according to the U.S. Commodity Futures Trading Commission. Net-long positions in futures and options combined were up by 13,434, or 12 percent, to 129,530, the regulator said its Commitments of Traders report on Dec. 7.
