BLBG: Oil Little Changed as Report Shows Record Chinese Crude Imports
By Grant Smith
Aug. 11 (Bloomberg) -- Crude oil traded little changed above $70 a barrel in New York after a report showed China imported record amounts of the fuel last month, bolstering hopes for an economic rebound.
Oil snapped three days of declines as Chinese oil imports jumped 18 percent to the equivalent of 4.6 million barrels a day, the Beijing-based customs office said on its Web site today. A U.S. government report tomorrow will probably show that crude supplies increased, according to a Bloomberg survey.
“Chinese thirst for oil is not abating,” said Olivier Jakob, managing director of consultants Petromatrix GmbH in Zug, Switzerland. “A long-term investor will ask himself what Chinese oil consumption will be when global economic demand starts to recover.”
Crude oil for September delivery traded for $70.70 a barrel, 10 cents higher, on the New York Mercantile Exchange as of 11:22 a.m. London time. The contract earlier climbed as much as 62 cents, or 0.9 percent, to $71.22 a barrel.
New York oil futures have doubled since February as the decline in the dollar made commodities more attractive and rising equity markets buoyed investor confidence. Oil touched an eight-month high of $73.38 a barrel on June 30.
“We’re seeing less consumption in OECD economies, but a lot more consumption in places like China,” Francisco Blanch, head of global commodities research at Bank of America Corp.’s Merrill Lynch unit, said in a Bloomberg Television interview.
No More Cuts
The Organization of Petroleum Exporting Countries will probably keep production levels unchanged when it meets in Vienna next month, Blanch added.
“OPEC probably stays put and that continues to keep upward pressure on prices,” Blanch said. “Certainly no more production cuts at this stage; no more are necessary.”
The president of OPEC said Aug. 9 he was content with current prices, signaling the 12-member group may keep quotas steady when it meets in Vienna on Sept. 9.
Crude oil prices around $70 are “not bad” and are necessary to maintain investment, Jose Maria Botelho de Vasconcelos, who is also Angola’s petroleum minister, told reporters in Luanda. The OPEC Secretariat in Vienna will release its monthly report today.
Brent crude oil for September on London’s ICE Futures Europe exchange rose as much as 54 cents, or 0.7 percent, to $74.04 a barrel. The contract traded at $73.60 a barrel at 11:21 a.m. in London.
U.S. oil inventories probably rose 1 million barrels last week as traders took advantage of a so-called contango price structure that offers an incentive to store supplies, a Bloomberg survey of nine analysts showed before a weekly report tomorrow. It would be the third consecutive gain.
Gasoline stockpiles probably dropped 1.3 million barrels last week, according to the survey. The Energy Department will release its monthly Short-Term Energy Outlook today.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
