News: Brent crude heads toward $70 as China energy demand outlook brightens.
SINGAPORE (Reuters) – Oil prices soared on Monday, with Brent heading to $ 70 a barrel as data showed China’s economic recovery accelerated early in 2021 and the outlook for energy demand at the world’s largest oil importer improved.
Brent crude oil futures for May rose 57 cents, or 0.8%, to $ 69.79 a barrel at 0748 GMT, while US West Texas Intermediate crude oil stood at $ 66.17 a barrel in April, an increase of 56 cents or 0.9%.
China’s industrial production growth accelerated from January to February, exceeding expectations, while daily refinery throughput data rose 15% year over year.
China’s heavy industry saw robust growth as cement, steel, coal and aluminum production saw double-digit growth compared to the pre-COVID pandemic in 2019, said Seng Yick Tee, an analyst at Chinese consultancy SIA Energy, adding that the growth rates were “insane” given the large bases of China.
It takes energy to manufacture and transport all of these materials, he said.
Leading oil exporter Saudi Arabia cut crude oil supply for at least four North Asian buyers by up to 15% in April while meeting normal monthly needs of Indian refineries, Refinery Sources told Reuters on Friday.
The supply cuts are due to the fact that the Organization of Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, decided earlier this month to extend most of the supply cuts until April.
In early February, the US overtook Saudi Arabia to become India’s second largest supplier, data from trade sources showed.
In the US, weekly oil refineries’ capacity rose 1.6 million barrels a day on Friday, according to research firm IIR Energy, as more facilities resume operations after failures during the severe Texas winter storm last month.
Regardless, U.S. energy companies cut the number of operating oil and gas rigs by one in the first weekly decline since November, according to Baker Hughes Co.
Reporting by Florence Tan; Adaptation by Lincoln Feast and Kenneth Maxwell
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