Oil up to $110 on strong Chinese data, supply

Business & Markets 2013
Written by Reuters
Monday, 02 December 2013 17:56
A + A - Reset
LONDON (Dec 2): Brent crude oil climbed towards $110 a barrel on Monday
after Chinese data showed strong industrial activity and as social and political
unrest in Libya limited supply from the key North African producer.
Manufacturing growth in China, the world's biggest crude oil importer, stayed at
18-month highs in November due to robust domestic and foreign demand, the
official Purchasing Managers' Index showed
Oil exports from Libya are only around 130,000 barrels per day (bpd), Deputy
Oil Minister Omar Shakmak told Reuters in an interview on Monday, more than
1.2 million bpd below pre-revolution supply levels.
Brent crude for January was up 20 cents to $109.89 a barrel by 0925 GMT,
after finishing down $1.17 in the previous session. U.S. crude was up 15 cents
at $92.87 a barrel, after settling 42 cents higher on Friday.
"We are back around $110 after better-than expected Chinese factory data,"
said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in
Frankfurt.
"OPEC oil supply is also down a bit due to lost Libyan exports, keeping the
market balanced," Fritsch added.
Oil prices found some extra support from evidence that the Organization of the
Petroleum Exporting Countries (OPEC) pumped less oil in November, mainly
due to Libya.
Reuters' monthly OPEC survey on Friday showed the cartel produced 29.64
million bpd in November, a two-and-a-half-year low and down from a revised
29.70 million bpd in October.
The Reuters' survey estimated protests at Libyan oilfields and terminals cut average output to 350,000 bpd in November and by the end of
the month production was around 250,000 bpd, a fraction of the 1.4 million bpd it pumped earlier this year.
In recent weeks Libyan supply has fallen even further, Deputy Oil Minister Shakmak told Reuters, with total oil output down to just 224,000
bpd.
OPEC ministers are meeting in Vienna on Wednesday to decide production policy, and ministers and OPEC officials have indicated the
group's output target is likely to stay unchanged at 30 million bpd.
But next year production will need to be reduced as demand for OPEC oil will decline sharply, analysts say.
"From now until the end of March, the market looks well balanced and the price should stay supported. But from June, there will be a need
for a cut," a senior OPEC delegate told Reuters.