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Thursday, December 9, 2021

Brent slips below $111 after China data, U.S, payrolls eyed

* China Jan-Feb exports beat forecasts, crude imports down

* U.S. jobless claims support prices, non-farm payrolls awaited

* North Sea pipeline re-opening pressures Brent lower

By Ramya Venugopal

SINGAPORE, March 8 (Reuters) – Brent crude futures slipped below $111 per barrel in early Asia business on Friday after trade data from China reaffirmed a moderate recovery in the world’s biggest energy consumer, while the restart of the North Sea pipeline also weighed.

China’s overall exports rose faster than expected, while crude imports in the first two months of the year were down 2.4 percent from a year ago, customs data showed.

The outlook for oil markets remains weak on subdued demand in the United States and Europe as well as expectations of higher supply from U.S. shale oil, said Tony Nunan, an oil risk manager at Mitsubishi in Tokyo.

Front-month Brent futures fell 33 cents to $110.82 per barrel at 0340 GMT, and are seen supported at the 200-day moving average at 109.22. U.S. crude shed 22 cents to $91.34 per barrel.

China’s crude “imports were really high at the end of the year and so was implied demand, so I think the numbers will zig and zag a bit,” said Nunan.

Crude imports by China in December rose 8 percent from a year ago, while imports for 2012 rose 6.8 percent, faster than the 6.05 percent rate in 2011.

“The overall market remains weak, but oil prices have fallen quite a bit from the highs, so they should stay near the support levels for now,” Nunan added.

Brent is down 6.8 percent from its 2013 high of $118.90 reached on Feb 8. Oil prices rose in the first three weeks of the year on expectations of buoyant global economic growth but quickly gave up gains as subsequent data suggested the recovery may not be as dramatic as first thought.

CHINA, U.S. CUES

China’s exports for January and February rose 23.6 percent, while imports increased 5 percent, compared with expectations for rises of 17.6 percent and 10.0 percent respectively.

Analysts look at the combined figures because of distortions caused by the Lunar New Year holidays, which fell in January in 2012 and in February this year.

Next in the line of macroeconomic cues for oil markets is the U.S. non-farm payroll numbers expected later on Friday, which is a key factor in determining the Federal REserve’s policy on quantitative easing.

The data follows’s Thursday’s jobless claims numbers for February, which unexpectedly fell last week.

“The decline in jobless claims signals a further improvement in the labour market, though traders will look to the non-farm payrolls numbers tonight for confirmation,” ANZ analysts said in a report on Friday.

According to a Reuters poll, U.S. jobs may have increased moderately by 160,000 jobs in February, slightly up from January’s 157,000.

Brent prices may also be reacting to the reopening of a North Sea pipline, traders said.

The Brent oil pipeline system in the British North Sea, which forms part of the global Brent benchmark, has began a restart after its second shutdown in almost two months.

The 80,000 barrel-per-day (bpd) system was shut on Saturday after more oil was found to have leaked into a leg of the 10,000 bpd Cormorant Alpha platform, which has remained offline since mid-January. (Reporting by Ramya Venugopal; Editing by Richard Pullin)

Source: Reuters

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