Oil Steadies After Weak Chinese Trade Data

Oil prices steadied on Monday as falling U.S. oil rig counts and signs of strong U.S. economic growth were balanced by a slump in Chinese imports, pointing to lower fuel demand in the world biggest energy consumer.

Global benchmark Brent crude oil for March was up 30 cents at $58.10 a barrel by 0420 GMT (11.20 p.m. EST Sunday) after rising as high as $59.06 earlier in the session. U.S. crude was up 60 cents at $52.29 a barrel, having hit a session high of $53.40.

Brent rose more than 9 percent last week, its biggest weekly rise since February 2011. The North Sea oil futures contract has climbed more than 18 percent in the past two weeks, its strongest showing since 1998. The move ended a six-month slide that saw oil prices lose more than half their value.

The number of rigs drilling for oil in the United States fell by 83 this week to 1,140 – the lowest since December 2011 – a survey showed on Friday, a clear sign of the pressure that tumbling crude prices have put on oil producers.

Stronger-than-expected growth in U.S. jobs in January also helped support oil, as non-farm payrolls increased 257,000, outstripping Wall Street forecasts.

But data showed further economic weakness in China, the world’s No. 2 oil consumer, helping cap oil gains.

China’s trade performance slumped in January, with exports falling 3.3 percent from year-ago levels while imports tumbled 19.9 percent, far worse than analysts had expected and highlighting a deepening slowdown.

Chinese crude oil imports slid by 7.9 percent in volume terms in January.

“Oil demand growth is slowing,” said Michal Meidan, director of London-based consultancy China Matters. “With less new refining capacity coming online, upside for demand is also limited there.”

Andrew Polk, economist at the Conference Board in Beijing, said he was concerned by the implications of the startlingly negative import figure.

“Import data suggest a substantial slowdown in the industrial sector. The first quarter looks to be pretty horrible,” Polk said.

Reuters technical analyst Wang Tao said crude charts suggested the run-up in prices may have ended for a while.

“I prefer a bearish bias,” Wang Tao told Reuters Global Oil Forum. “Both WTI and Brent may correct in this week before seeking their next direction.”

A strike by security guards closed Libya’s eastern oil port of Hariga, the country’s last functioning export port apart from two offshore fields, an official said on Sunday.

Source : Reuters