Brent oil rises on European, Chinese data; oversupply weighs

by **Cals** Tue 08 Sep 2015, 21:08

Brent oil rises on European, Chinese data; oversupply weighs

By Reuters / Reuters | September 8, 2015 : 8:30 PM MYT

LONDON (Sept 8): Brent oil rose on Tuesday as strong European economic data and a year-on-year increase in Chinese crude imports outweighed concerns about Asia's economic growth and global oil oversupply.

German exports in July climbed 2.4% on the month and imports grew by 2.2%, both hitting their highest values on record.

The euro zone economy grew faster than expected in the second quarter, data showed on Tuesday, with gross domestic product up 1.5% year-on-year versus a previous reading of 1.2%.

Brent futures were up $1.35 at $48.98 a barrel by 1210 GMT, recovering around half the losses made on Monday.

US crude was at $45.60 a barrel, down 45 cents since Friday's close, broadly in line with the overall movement of Brent from Friday.

Markets in the United States were closed on Monday for a national holiday.

US crude was weighed down by the closure of the largest crude distillation unit at [size=16]ExxonMobil Corp's 502,500-barrels-per-day (bpd) Baton Rouge, Louisiana, refinery.

In China, crude oil imports fell 13.4% in August to 6.29 million bpd from the previous month. They rose 5.6%, however, 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% year-on-year, on still-solid demand for gasoline and kerosene.

Asian and European 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% since June 2014 on a global supply glut driven by near-record pumping from theOrganization of the Petroleum Exporting Countries and US oil producers.

Despite calls from some OPEC members for cuts to the group's output, Saudi Arabian crude production 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.

Morgan Stanley analyst Adam Longson said oil prices should remain range-bound and low well into 2016 before starting to recover.

Crude oversupply had been overstated and would average only 700,000 bpd in 2015 compared with demand growth of about 2.1 million bpd in the year to date, he said.

"Nevertheless, new supply from Iran in (the first half of 2016) should keep the market oversupplied," Longson said.

[/size]