Brent crude oil rises above $110 on global growth prospects
Bareksa • 10 Jun 2014
Worker prepares to extract oil from olive paste (REUTERS)
U.S. oil rose by $1.75 a barrel to settle at $104.41.
Bareksa.com - Brent crude rose on Monday, gaining over $1 to surpass $110 a barrel for the first time in June, while U.S. crude rose by nearly $2, as strong Chinese and U.S. data pointed to healthy economic growth and higher demand for oil from the world's top two consumers.
China's exports beat forecasts in May on firmer global demand, rising 7 percent from a year earlier and quickening from April's increase of 0.9 percent. The strong gains overshadowed an unexpected fall in imports that could signal weaker domestic demand.
Market watchers said U.S. crude's outperformance, in the absence of any clear change in the fundamental picture, could not be sufficiently explained by the Chinese data.
"Don't let anyone tell you it's China, or U.S. payrolls," said Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania. "Something's happening and we don't know what it is."
Brent rose by $1.38 a barrel to settle at $109.99, after settling down 18 cents and declining 0.7 percent last week.
U.S. oil rose by $1.75 a barrel to settle at $104.41.
The spread <CL-LCO1=R> between the two benchmarks settled at $5.58, after swinging between $5.25 and $6.15 during Monday's session.
Valero Energy Corp had flaring at its 125,000 barrel-per-day Meraux, Louisiana, refinery Sunday, according to the Louisiana Department of Environmental Quality.
The positive data boosted an oil market already bolstered by the loss of crude exports from Libya, where violence and civil turmoil have cut oil output by more than 1 million barrels per day (bpd) from pre-unrest levels.
"Libya's crude oil exports are getting closer to zero," said Richard Hastings, macro strategist at Global Hunter Securities in Charlotte, North Carolina.
The Chinese data followed U.S. figures from Friday showing employment returning to its pre-recession peak, confirming steady improvement in the world's top economy.
The Organization of the Petroleum Exporting Countries meets in Vienna this week and is likely to keep an output target of 30 million bpd. Members of the cartel, which pumps a third of the world's oil, are happy with oil prices and producing enough to cover most of their budget needs (Source : Reuters)