Oil rallies on Chinese import boost and Mideast tensions

Oil rallies on Chinese import boost and Mideast tensions
Oil rallies on Chinese import boost and Mideast tensions

Oil prices firmed on Friday as strong Chinese oil import data and turmoil in the Middle East boosted bulls in a market that has already shown signs of rebalancing after years of excess.

Brent was at $57.23 at 0914 GMT, up 98 cents. U.S. West Texas Intermediate (WTI) crude was at $51.41 per barrel, up 81 cents from its last settlement.

The contracts were on track for weekly gains of more than 2 percent and 4 percent, respectively.

Chinese oil imports hit 9 million barrels per day (bpd) in September, data showed on Friday. Imports averaged 8.5 million bpd between January and September, solidifying China's position as the world's biggest oil importer.

"We woke up with the strong data from China. That's on the supportive side," said Olivier Jakob, managing director of PetroMatrix.

China's huge imports have been strongly driven by purchases for its strategic petroleum reserves (SPR).

The nation has spent around $24 billion on building its crude reserves since 2015 and now holds around 850 million barrels of oil in inventory, according to the International Energy Agency (IEA).

Unrest in Iraq, and possible U.S. action on the Iran nuclear deal, also underpinned prices.
On Friday, local television reported that tens of thousands of Kurdish fighters had deployed in the Kirkuk oil region to confront possible "threats" from Iraqi forces.

Tensions between the two, which traders fear could cut off oil exports from the region, have been building since Iraq's Kurds overwhelmingly backed independence in a Sept. 25 vote.

Later on Friday, U.S. President Donald Trump is expected to announce that he will not certify the 2015 Iran nuclear deal. The deal has to be re-certified every 90 days and is due for renewal on Sunday.

CNBC

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