Oil climbed for a second day on Friday underpinned by expectations of tighter supply and on reports of record Chinese demand, but prices remained under pressure from rising U.S. crude and gasoline inventories.
Brent crude, the international benchmark, rose 15 cents to $ 54.31 a barrel 0257 GMT. U.S. West Texas Intermediate (WTI) crude oil futures were trading up 17 cents at $ 51.54 per barrel.
The International Energy Agency (IEA) said that while it was “far too soon” to gauge OPEC members’ compliance with promised cuts, commercial oil inventories in the developed world fell for a fourth consecutive month in November, with another decline projected for December.
China’s December refinery runs were up 3.7 percent at 47.82 million tonnes, or 11.26 million barrels per day (bpd), data from the statistics bureau showed, touching a new daily record. Crude throughput hit the highest level in history for the year at 10.79 million bpd, data showed.
“Chinese data is positive for the market but it was anticipated,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
“The growth in demand is expected to continue this year, it is the safest assumption as the economy is going fairly steady.”
Boosted by higher government spending and record bank lending, China’s economy grew by a faster-than-expected 6.8 percent in the fourth quarter, giving it a solid tailwind heading into what is expected to be a turbulent 2017.
However, rising crude oil and gasoline stocks in the United States are capping prices.
U.S. crude inventories rose unexpectedly last week as refineries sharply slowed production, while gasoline stocks soared amid weak demand, the Energy Information Administration said on Thursday.
Crude inventories rose 2.3 million barrels in the week to Jan. 13, compared with analyst expectations for an increase of 342,000 barrels.
The data showed much larger-than-expected builds in gasoline with inventories of the motor fuel on the U.S. East Coast, the biggest demand region, swelling to the highest weekly levels on record for this time of year, when refiners typically begin storing barrels ahead of summer driving season.
“Crude oil prices were range-bound despite the EIA’s weekly report showing a gain in inventories,” ANZ said in a note.
“OPEC continued its commentary around a strong adherence to the production cut agreement as the monitoring committee meetings to discuss progress.”
Brent as well WTI futures were on track for a second week of declines.
OPEC, which is cutting oil output alongside independent producer Russia, wants a lasting partnership with Moscow, Saudi Energy Minister Khalid al Falih told Reuters. He said the deal need not be extended for a full year if the market rebalances.
(Reporting by Naveen Thukral; Editing by Joseph Radford and Christian Schmollinger)
