Brent rises towards $118 on strong China data, Iran worries

SINGAPORE Fri Feb 8, 2013 11:23am IST

Oil derricks are silhouetted against the rising sun on an oilfield in Baku, January 24, 2013. REUTERS/David Mdzinarishvili

Oil derricks are silhouetted against the rising sun on an oilfield in Baku, January 24, 2013.

Credit: Reuters/David Mdzinarishvili

Related Topics

Inside the Peshawar school

Inside the Peshawar school

The aftermath inside the Pakistan school where at least 132 students and nine staff members were killed by Taliban gunmen.  Pictures 

SINGAPORE (Reuters) - Brent futures rose towards $118 per barrel on Friday, heading for a fourth weekly gain as robust trade data from China bolstered the outlook for demand, while escalating tensions in the Middle East stoked concerns over supply.

China's January exports and imports outpaced forecasts in a Reuters poll, adding to evidence of a rebound in the world's second-biggest oil consumer, although analysts are cautious after the economy last year grew at its slowest pace since 1999.

Numbers showing China's crude oil imports rose to their third highest daily rate on record in January also buoyed prices.

Fiery rhetoric by Iran's supreme leader rejecting a U.S. offer for bilateral talks added to concern that the biggest risk factor for oil markets won't be resolved soon.

Front-month Brent futures rose 58 cents per barrel to $117.82 at 0410 GMT. U.S. crude added 31 cents to $96.15, but is still heading for its first loss in nine weeks.

"We have been seeing strong economic numbers ... (and this trend) is going to underpin the oil markets for some time," said Ben le Brun, market analyst at OptionsXpress in Sydney.

"It does not look like the tensions with Iran are going to dissipate anytime soon. They are going to be bubbling under the surface, which will keep a floor under the oil price."

Currently U.S.-Iran contact is limited to talks between Tehran and a so-called P5+1 group of powers on Iran's disputed nuclear programme which are to resume on February 26 in Kazakhstan.

Adding to supply concerns is the instability in Tunisia, located between major oil producers Algeria and Libya, where the assassination of an opposition leader this week led to street riots and violence.

CHINA REBOUND

China's strong trade data for January, the first hard economic numbers of the year, showed a surge in exports and imports that was not solely explained by the timing of the Lunar New Year holiday and confirmed the rebound in the world's second-biggest economy.

Exports grew 25 percent, far outpacing analyst expectations of a 17 percent rise, while its imports jumped nearly 29 percent, faster than the 23 percent increase expected in a Reuters poll.

"The numbers are stronger than expected, which is an encouraging sign," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "(But) we will need to wait until March to start getting a better sense of the medium-term trend on China."

China's crude oil imports in January rose 7.4 percent from a year ago to 5.92 million barrels per day, the third highest daily rate on record, official data showed, as refineries ramped up production ahead of the Lunar New Year.

(Editing by Joseph Radford)

FILED UNDER:

Reforms Push

REUTERS SHOWCASE

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

26/11 Plotter

26/11 Plotter

Pakistan to challenge bail for Mumbai attack "mastermind".  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage