SINGAPORE: Oil prices rose on Monday, with Brent heading toward $70 a barrel, as data showed China’s economic recovery accelerated at the start of 2021, boosting the energy demand outlook at the world’s largest oil importer.
Brent crude futures for May gained 47 cents, or 0.7%, to $69.69 a barrel by 0438 GMT while U.S. West Texas Intermediate crude for April was at $66.10 a barrel, up 49 cents, or 0.8%.
China’s industrial output growth quickened in January-February, beating expectations, while its daily refinery throughput data rose 15% from the same period a year ago, data showed.
China’s heavy industry has shown robust growth as its output of cement, steel, coal and aluminium registered double-digit growth compared with 2019’s pre-COVID pandemic levels, said Seng Yick Tee, analyst at China consultancy SIA Energy, adding that the growth rates were “insane” given China’s large bases.
Producing and transporting all these materials requires energy, he said.
Further supporting prices, top oil exporter Saudi Arabia has cut the supply of April-loading crude to at least four north Asian buyers by up to 15%, while meeting the normal monthly requirements of Indian refiners, refinery sources told Reuters on Friday.
The supply cuts come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, decided earlier this month to extend most of its supply cuts into April.
In the United States, oil refiners’ weekly capacity were seen up 1.6 million barrels per day, research company IIR Energy said on Friday, as more plants resume operations following outages during the severe winter storm in Texas last month.
Separately, U.S. energy firms have cut the number of oil and natural gas rigs operating by one in the first weekly drop since November, according to Baker Hughes Co.