Oil gains on China data

An oil rig is shown in this file photo.

An oil rig is shown in this file photo.

Published Dec 10, 2012

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World oil prices rose on Monday, making a positive start as traders digested a raft of upbeat economic data in top energy consumer China, ahead of an OPEC oil output meeting later in the week, dealers said.

Brent North Sea crude for January added won $1.05 to $108.07 per barrel in late morning deals in London.

New York's main contract, light sweet crude for delivery in January, or West Texas Intermediate (WTI), won 50 cents to $86.43 a barrel.

“Crude oil prices found some well-needed support and climbed higher, supported by fairly strong economic data from China, including robust retail sales and factory orders, despite the fairly weak trade data,” said Sucden analyst Myrto Sokou.

The National Bureau of Statistics on Sunday released data showing production at China's factories, workshops and mines rising 10.1 percent year-on-year in November.

Also on Sunday the statistics bureau said retail sales, China's main gauge of consumer spending, rose 14.9 percent year-on-year in November.

The result, an improvement from October's gain of 9.6 percent, has led to optimism that the worst of a slowdown in China - the world's second biggest economy - may be over.

However, data released on Monday showed Chinese exports rose 2.9 percent in November and imports were flat, while the trade surplus sank to $19.6 billion from October's $32.0 billion, and well below expectations for $27.8 billion.

“Oil is up, it's really reacting to the positive economic news out of China,” said Victor Shum, managing director for downstream energy consulting at IHS Inc.

“It looks like China has turned the corner and the economy is recovering with their latest manufacturing data,” he told AFP.

Across in Vienna this week, meanwhile, OPEC will gather for a ministerial meeting to decide on the cartel's oil production ceiling, as a predicted drop in demand risks weighing on high crude prices despite Middle East unrest.

The Organization of Petroleum Exporting Countries (OPEC), which pumps out 35 percent of the world's oil, may also finally decide on a new head after a vote to appoint a successor to Secretary-General Abdullah El-Badri was postponed in June.

The 12-nation cartel, which includes the world's biggest oil exporter Saudi Arabia and Iran - currently under an oil embargo - was to hold a regular output meeting at OPEC's headquarters in the Austrian capital on Wednesday.

At its last meeting in June, OPEC opted to keep its oil output ceiling at 30 million barrels per day (mbpd) - after agreeing on the level a year ago - and vowed to eliminate over-production. - Sapa-AFP

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