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Brent crude heads toward $70 as China energy demand outlook brightens

CommoditiesMar 15, 2021 05:15
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3/3 © Reuters. FILE PHOTO: A worker collects a crude oil sample at an oil well operated by Venezuela's state oil company PDVSA in Morichal 2/3

By Florence Tan

SINGAPORE (Reuters) - Oil prices rose on Monday, with Brent heading toward $70 a barrel, as data showed China's economic recovery accelerated at the start of 2021, boosting the energy demand outlook at the world's largest oil importer.

Brent crude futures for May gained 47 cents, or 0.7%, to $69.69 a barrel by 0438 GMT while U.S. West Texas Intermediate crude for April was at $66.10 a barrel, up 49 cents, or 0.8%.

China's industrial output growth quickened in January-February, beating expectations, while its daily refinery throughput data rose 15% from the same period a year ago, data showed.

China's heavy industry has shown robust growth as its output of cement, steel, coal and aluminium registered double-digit growth compared with 2019's pre-COVID pandemic levels, said Seng Yick Tee, analyst at China consultancy SIA Energy, adding that the growth rates were "insane" given China's large bases.

Producing and transporting all these materials requires energy, he said.

Further supporting prices, top oil exporter Saudi Arabia has cut the supply of April-loading crude to at least four north Asian buyers by up to 15%, while meeting the normal monthly requirements of Indian refiners, refinery sources told Reuters on Friday.

The supply cuts come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, decided earlier this month to extend most of its supply cuts into April.

In the United States, oil refiners' weekly capacity were seen up 1.6 million barrels per day, research company IIR Energy said on Friday, as more plants resume operations following outages during the severe winter storm in Texas last month.

Separately, U.S. energy firms have cut the number of oil and natural gas rigs operating by one in the first weekly drop since November, according to Baker Hughes Co.

Brent crude heads toward $70 as China energy demand outlook brightens
 

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Comments (3)
Adam Young
Adam Young Mar 15, 2021 10:59
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Missing the picture here again! Do you not think that oils rise in price along with lumber, corn, wheat, soybeans, platinum and near enough all other commodities isn't a massive sign of inflation? These BS articles written by morons that haven't got a clue about economics really angers me! They print 25% of all currency ever created last year and you wonder why prices are going up? WAKE UP PEOPLE!!!!
ian Chamberlain
ian Chamberlain Mar 15, 2021 10:59
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you make a very good point. I guess my comment was more about these recurring news articles suggesting the reason the price has increased is due to supply demand optimism, and then the next day the same article justify the drop in price because today there is supply demand pessimism......these news articles are worthless.,......your point makes a lot of sence
Cedric Cedric
Cedric Cedric Mar 15, 2021 7:21
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Pump and dump ! As these prices china is drawing from it is reserves waiting for Iran to pump like mad !
ian Chamberlain
ian Chamberlain Mar 15, 2021 1:51
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the demand doesn't seems to have changed in the last 6 months, but these news stories seem to pop up every other day. tomorrow the headline will be "oil drops on worries of low demand". The world is not going to be travelling much this year, and working from home is here to stay., and cars are going electric......so bright future for oil as an energy source (not). granted, oil is an important petrochemical feed stock, so that's where the long term growth exists
 
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