Oil prices higher on China trade data

June 9, 2014


A photo showing oil flowing/FILE
A photo showing oil flowing/FILE
LONDON, Jun 9 – Oil prices rose solidly on Monday, boosted by robust Chinese trade figures and a solid US jobs report that boosted hopes for a pick-up in demand, analysts said.

Brent North Sea crude for delivery in July climbed 65 cents to stand at $108.69 a barrel in London afternoon trading.

US benchmark, West Texas Intermediate for July delivery, gained 70 cents compared with Friday’s close to $103.36 a barrel.

“The weekend (Chinese) report comes as a quite unexpected surprise on the upside, underpinning the demand for commodities,” Desmond Chua, an analyst for traders CMC Markets, told AFP.

China’s trade surplus surged in May, official data showed Sunday, as export growth accelerated sharply while imports saw a surprise fall.

Exports from the world’s second biggest economy increased 7.0 percent and imports declined 1.6 percent, resulting in a trade surplus of $35.92 billion, up 74.9 percent year-on-year.

Oil prices were supported also by US jobs data.

In Washington on Friday, the Labor Department said the US economy added a net 217,000 jobs in May, in line with expectations and marking the fourth straight month above 200,000. The figures are the latest in a string of data out of the United States indicating a recovery is well on track.

China and the United States are the world’s biggest energy users and any sign of improvement in their economies lifts expectations of a rise in demand for oil.

Investors meanwhile kept an eye on Ukraine after its new Western-friendly President Petro Poroshenko vowed to end the fighting with pro-Russia separatist rebels in the east.

Markets are on alert for a potential full-blown conflict in Ukraine would disrupt supplies and send energy prices soaring. Russia accounts for nearly 40 percent of EU gas imports, with half of that flowing via pipelines that run through Ukraine.

EU-mediated talks were underway in Brussels on resolving the latest gas price dispute between Kiev and Moscow, with Russia threating to shut off supplies by Wednesday.


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