Oil stabilizes on German, Chinese data; oversupply weighs

Oil prices stabilized on Tuesday as strong German economic data and a year-on-year increase in Chinese crude imports balanced concerns about Asia’s economic growth and global oil oversupply.

German exports and imports hit record highs in July. Exports climbed 2.4 percent on the month to 103.4 billion euros ($115.6 billion) while imports grew by 2.2 percent to 80.6 billion euros.

Traders said the strong German data had helped counter a further darkening of Asia’s economic outlook.

Brent futures LCOc1 rose 59 cents to $48.22 a barrel by 0853 GMT.

U.S. crude CLc1 was at $44.75 a barrel, down $1.30 since Friday’s close, weighed down by the closure of the largest crude distillation unit at ExxonMobil Corp’s (XOM.N) 502,500-barrels-per-day (bpd) Baton Rouge, Louisiana, refinery.

U.S. markets were closed on Monday for the Labor Day holiday, meaning there was no official close for U.S. crude.

Brent was down $1.39 from its Friday close.

In China, crude oil imports fell 13.4 percent in August to 26.59 million tonnes (6.29 million bpd) from the previous month. But they rose 5.6 percent from a year earlier.

“People are looking beyond the sharp (monthly) drop in Chinese import data and looking at the stronger details contained within it,” Commerzbank senior oil analyst Carsten Fritsch said.

In the first eight months of 2015, China’s crude imports were up 9.8 percent year-on-year at 6.63 million bpd, on still-solid demand for gasoline and kerosene as a growing middle class drives and flies more.

Asian .SSEC and European .FTEU1 stocks rose on Tuesday. The dollar has also fallen against a basket of currencies since the end of last week, making oil less expensive for holders of other currencies.

Oil prices have fallen almost 60 percent since June 2014 on a global supply glut driven by near-record pumping from the Organization of the Petroleum Exporting Countries and from near-record levels of U.S. oil production.

Despite calls from some OPEC members for cuts to OPEC output, crude production from Saudi Arabia is likely to stay around current levels in the fourth quarter of this year as a decline in domestic crude burning for power generation is expected to be offset by a seasonal rise in global demand.

Investors are awaiting monthly oil supply and demand data from U.S. and global energy authorities to give oil further direction.

source: Reuters