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Oil futures rose Wednesday, finding support after data showed China’s crude imports rose in May, despite a decline in imports overall, and as traders awaited an official reading on U.S. inventories after industry data showed a drop in crude stocks but a rise in fuel supplies.
Price action
-
West Texas Intermediate crude for July delivery
CL00,
+0.96% CLN23,
+0.96%
rose 93 cents, or 1.3%, to $72.67 a barrel on the New York Mercantile Exchange. -
August Brent crude
BRN00,
+0.89% BRNQ23,
+0.89% ,
the global benchmark, was up 96 cents, or 1.3%, at $77.25 a barrel on ICE Futures Europe. -
Back on Nymex, July gasoline
RBN23,
+0.21%
rose 0.3% to $2.571 a gallon, while July heating oil
HON23,
+0.84%
was up 1.1% at $2.393 a gallon. -
July natural gas
NGN23,
+1.41%
rose 1% to $2.285 per million British thermal units.
Market drivers
China exports dropped 7.5% from a year ago in May, cooling substantially from the 8.5% growth seen in April, data from the General Administration of Customs showed Wednesday. A survey of economists by The Wall Street Journal produced a median forecast for a 1% decline.
Imports declined 4.5% from a year earlier, compared with a 7.9% decline in April. Economists, on average, had expected imports to have fallen 8.1%.
But the data showed China’s crude oil imports recovered to 51.44 million tons, or around 12.16 million barrels a day, up 17% month-on-month and 12% year-over-year, in May, noted Warren Patterson and Ewa Manthey, commodity strategists at ING, in a note.
“Demand slowdown from China has been a major concern for the crude oil market recently, and a recovery in oil imports is likely to provide some comfort to the oil market,” they wrote.
Higher refinery utilization has also increased refined product supplies in the Chinese market, with China again becoming a net exporter of refined products last month, they said.
The American Petroleum Institute late Tuesday reported a 1.7 million barrel drop in U.S. crude inventories last week, according to a source citing the data, while gasoline stocks were seen up 2.4 million barrels and distillates up 4.5 million barrels.
Official data from the U.S. Energy Information Administration is due Wednesday morning. Analysts surveyed by S&P Global Commodity Insights, on average, look for crude stocks to fall 1 million barrels, while distillate inventories are expected to rise by 750,000 barrels and distillate stocks are seen 1 million barrels higher.
