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Oil rises as China reports record crude imports, but soaring US output caps gains

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - prices rose on Thursday after record Chinese crude eased concerns that a slowdown in the world's No.2 economy could stoke an emerging fuel glut.

However, markets were held back somewhat after the became the world's top as its output hit record levels.

Front-month Brent futures were at $72.27 a barrel at 0800 GMT, up 21 cents, or 0.3 percent, from their last close.

U.S. Intermediate (WTI) crude futures were at $61.95 per barrel, up 28 cents, or 0.4 percent, from their previous settlement.

China's October crude surged 32 percent from a year earlier to 40.80 million tonnes, or 9.61 million barrels per day (bpd), data from the showed on Thursday, climbing from 9.05 million bpd in September. The previous daily record of 9.6 million bpd was touched in April 2018.

rose 8.1 percent for the first 10 months of the year from the same period last year to 377.16 million tonnes, or 9.06 million bpd, on track for another record year of shipments.

"Crude oil imports rose ... as uncertainty around tariffs on U.S. imports and sanctions on eased," said following the data release.

"We also saw demand from China's independent refineries rise," it added.

THE ONLY WAY IS UP

Preventing crude from rising further, however, was record U.S. crude production, which hit a whopping 11.6 million bpd in the week ending Nov. 2, according to (EIA) data released on Wednesday.

That's a threefold increase from the U.S. low reached a decade ago, and a 22.2 percent rise just this year. It makes the the world's biggest of crude.

More U.S. oil will likely come. The EIA expects output to break through 12 million bpd by mid-2019, largely thanks to a surge in

Meanwhile, U.S. crude inventories rose by 5.8 million barrels in the week ending Nov. 2, to 431.79 million barrels, the EIA said.

Crude stocks moved back above their five-year average levels in October.

Production has not just risen in the United States, but also in many other countries, including Russia, Saudi Arabia, and Brazil, stoking concerns of a return of oversupply that depressed between 2014 and 2017.

With output overall rising, supply is ample despite the sanctions now in place, prompting rumblings within the dominated (OPEC) that renewed supply cuts may be needed next year to prevent a glut.

"OPEC and may use cuts to support $70 per barrel," said Ole Hansen, at Saxo

(Reporting by Gloystein; Editing by Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 08 2018. 13:32 IST
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