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Oil steadies near US$58 a barrel
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[LONDON] Brent crude prices steadied near US$58 a barrel on Monday as falling US oil rig counts and signs of healthy US growth offset concerns over the strength of the Chinese economy.
China's trade performance slumped in January, pointing to lower fuel demand in the world's biggest energy consumer. Exports fell 3.3 per cent from a year earlier while imports tumbled 19.9 per cent, highlighting a deepening slowdown.
But the falling number of US oil rigs, at its lowest since December 2011, reduced the impact of the Chinese data on oil prices, which have dropped more than 50 percent since June.
Stronger-than-expected growth in US jobs in January also helped support oil, as non-farm payrolls increased 257,000, outstripping Wall Street forecasts.
Global benchmark Brent crude oil for March was up 10 cents at US$57.90 a barrel by 1118 GMT after rising as high as US$59.06 earlier in the session. US crude was up 56 cents at US$52.25 a barrel, having hit a session high of US$53.40.
While signs of an economic slowdown in China depressed the market, analysts said crude import figures remained high and the disappointing data was unlikely to derail a rally in oil prices. "I think we'll get a bit of a pullback. But will it send prices back to the lows? I'm not convinced about that," said Michael Hewson, chief market analyst at CMC Markets. "We've had such a strong decline that some sort of bounce back is inevitable." Brent rose more than 9 per cent last week, its biggest weekly rise since Feb 2011. The North Sea oil futures contract has climbed more than 18 per cent in the past two weeks, its strongest showing since 1998. "It's still the same pattern," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt."Markets are ignoring the bearish news and rather trade on the bullish news." Preliminary Chinese January customs data came in at 27.22 million tonnes of crude imports, though estimates from Thomson Reuters Research and Forecasts put the final figure at about 30 million tonnes.
Reuters technical analyst Wang Tao said crude charts suggested the increase in prices may have ended for a while. "I prefer a bearish bias," Mr Wang Tao told Reuters Global Oil Forum. "Both WTI and Brent may correct in this week before seeking their next direction."