Saturday , July 24 2021

Oil rises to 2019 on top of strong demand from China despite downturn Reuters

© Reuters. Pumpjack seen in the Shengli oil field operated by Sinopec in & # 39; Dongying, Shandong

By Henning Gloystein

SINGAPORE (Reuters) – The oil prices rose to the highest for 2019 on Monday after data showed the processing refinery in China, the second largest oil consumer in world, rose to a record in 2018, despite a declining economy the last year.

Analysts said prices are also being supported by a reduction in supply led by the petroleum exporting countries (OPEC).

International Futures Brent crude oil () were & # 39; $ 62.94 per barrel in & # 39; 0404 GMT, b & # 39; 24 cents, or 0.4 percent, from their last close. Brent rose before & # 39; & # 39; over $ 63 for the first time in 2019.

US crude futures West Texas Intermediate (WTI) was $ 54.05 per barrel, up 25 cents, or 0.5 percent. It was the first time this year the WTI rose & # 39; above $ 54 per barrel.

Traders said that the price increases came after data released by the National Bureau of Statistics of China on Monday showed that the flow of crude oil refineries rose to record 603.57 million tonnes in 2018, or 12.12 million barrels per day (BPD), 6.8 percent from the previous year.

The strong figures for demand for oil came despite economic growth of China in 2018 slowed to the weakest in 28 years, b & # 39; 6.6 per cent against 6.8 per cent in 2017.

Although the decline was in line with & # 39; expectations and not as sharp as it was looking to some analysts, the second cooling of the world's largest economy shed & # 39; shadow on global growth.

"The overall outlook remains unclear, despite emerging positively from dovish Fed (now boost applications & # 39; mortgage & # 39; the US), faster easing of China (growth stabilization -credit of China) and most durable cease-fire between the US and China, "said the US bank JP Morgan f & # 39; note.

However, analysts said the reduction in OPEC supply-driven X & # 39; likely to support crude oil prices.

"Brent can & # 39; continue & # 39; & # 39; over $ 60 per barrel on the compliance of & # 39; the OPEC +, the expiration of the waivers & # 39; Iran and the production slow growth & # 39; the United States, "said JP Morgan.

It is recommended that investors should "stay long" crude oil, by referring to the purchase of & # 39; future in the expectation that rising prices.

The researchers & # 39; Bernstein Energy said that a shortage of supply led OPEC "will again & # 39; bring the market back in the supply imbalance" for most of 2019 and this should cause prices rise to $ 70 a barrel before the end of the year.

In the United States, with an energy firms have reduced the number of drilling rigs for oil 21 a week to 18 January, while the total number decreased to 852, the lower than in May 2018, said company Baker Hughes in the energy services Friday.

It was the biggest decline since February 2016, as the drilling machine reacted to the fall of 40 percent in the price of the United States late last year.

However, crude oil production of the United States still increased by more than 2 million BPD in 2018, to a record 11.9 million BPD.

By stopping the rig, with the last year's growth rate is unlikely to be repeated in 2019, although many analysts expect annual production to average more than 12 million BPD, which making the US the largest oil producer in the world before Russia and Saudi Arabia.

GRAPHIC: The number of & # 39; oil rig & # 39; USA –

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