WTI Oil Futures Trade Near Six-Week High on Robust China Demand

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By m rochan | December 9, 2013 10:50 PM EST

Oil rig pumpjacks, or thirsty birds, extract crude from the Wilmington oil field where Tidelands Oil Production Company, owned by Occidental Petroleum, operates, near Long Beach, California, in July, 2013 (Reuters).

Benchmark US crude oil futures traded near six-week highs on 9 December after reviving oil sales to China and strong US labour market data signalled an economic recovery in the world's largest oil markets.

The January West Texas Intermediate WTI contract traded 15 cents higher to $97.80 a barrel on the New York Mercantile Exchange at 08:01GMT.

The contract added 27 cents to $97.65 on 6 December, its highest finish since 29 October. The volume of all futures traded was some 61% below the 100-day average, reported Bloomberg. Prices gained 5.3% for the week ended 7 December, the most since July.

The January Brent contract traded 10 cents lower at $111.51 a barrel on the London's ICE Futures Europe exchange. The European benchmark was at a premium of $13.71 to the WTI, from $13.96 on 6 December.

China's net oil imports jumped 19% to 5.73 million barrels-per-day (bpd) in November, rising from their lowest level in 14 months, government data showed on 8 December.

China's trade surplus expanded to $33.8bn, the largest in more than four years as exports exceeded estimates, according to data from the Beijing-based General Administration of Customs.

Earlier, government data from the US showed that the number of out of work Americans dropped to its level in five years in October, after some federal workers, who were counted as jobless in October, returned to work following the 16-day partial shutdown of the government.

The US Labor Department revealed that the nation's jobless rate fell to 7% after nonfarm payrolls increased by 203,000 new jobs in October, beating expectations.

"Economic news in the US last week was quite good, so that's boosting prices," Robin Mills, the head of consulting at Manaar Energy Consulting and Project Management in Dubai, told the news agency.

"The market is holding its gains," said Ric Spooner, a chief analyst at CMC Markets in Sydney.

Spooner predicts that investors could sell WTI contracts as prices approach $100 a barrel. "We're into a zone of resistance after the rally we've seen so far. People will be watching to see what it does from here."

The world's leading economy would account for about 21% of global oil demand in 2013, compared with 11% from China, according to the International Energy Agency (IEA).

US Oil Production

Shale oil production in the US is expected to push the nation past Russia as the world's top oil producer by 2015, the IEA said.

The US, the world's largest oil consumer, produced more crude oil than it imported in October, a first in nearly 20 years, according to government data.

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