Brent edges above $109 on record China import data

Brent crude oil edged above $109 a barrel on Wednesday on data showing Chinese oil imports hit a record high last month, raising hopes of strengthening demand from the world's No. 2 economy and biggest net oil importer. Crude oil imports rose 11.9 per cent in January from a year earlier to reach 28.16 million tonnes, or 6.63 million barrels per day (bpd), Chinese customs data showed. Also signalling a reversal of the recent economic slowdown in China, exports beat expectations, rising 10.6 per cent in January from a year earlier, while imports jumped 10 per cent. "The strong data underpins strength in oil markets and across the whole commodity board," Mark Keenan, head of commodities research in Asia at Societe Generale, said. "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 41 cents higher at $109.09 at 1032 GMT, after closing five cents higher in the previous session. US crude was up 71 cents at $100.66 a barrel, after closing 12 cents lower on Tuesday. US oil was buoyed by American Petroleum Institute (API) data showing crude stocks at the US delivery hub in Cushing, Oklahoma fell 2.5 million barrels in the week to February 7. Expectations of increased demand due to cold weather in the United States, especially for distillates, also supported prices, Distillates' stocks, including heating oil and diesel, fell 1.5 million barrels last week, the data showed. The more closely watched weekly stock report from the US Energy Information Administration (EIA) is due at 1530 GMT. Commerzbank said seasonal buying before last month's Chinese New Year celebrations might have distorted the data. "The crude oil processing data will provide further information, though they won't be published until March," it said in a note to clients. PetroChina and Sinopec starting operations at the 300,000-bpd Sichuan refinery and the 280,000-bpd Fujian refinery last month also buoyed Chinese crude imports. The imminent startup of a strategic petroleum reserve site in Huangdao, designed to hold 18.9 million barrels, may also have had an impact, Barclays analyst Sijin Cheng said. Oil prices also drew support from the EIA revising its world oil demand forecast for this year to 1.26 million bpd, 50,000 bpd higher than its earlier forecast. The government agency also cut its 2014 forecast for US crude oil production by 100,000 bpd to 8.4 million bpd and by 100,000 bpd to 9.2 million bpd for 2015. Meanwhile, gains in Brent were capped by expectations of a further increase in Libyan output. The North African nation's production is about 600,000 bpd. Progress in talks between world powers and Iran over its nuclear programme could also weigh on prices. International sanctions in the past two years have halved Iran's oil exports. Still, US President Barack Obama warned on Tuesday that the United States would come down like a "ton of bricks" on those that violated sanctions against Tehran. Copyright @ Thomson Reuters 2014

Brent edges above $109 on record China import data

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