(Bloomberg) — Brent oil edged higher following two days of losses with China posting an unexpected gain in export growth, adding to positive economic signs emerging from key energy consumers.
Futures in London rose 0.6% toward $73 a barrel. Chinese export and import growth in August exceeded estimates from economists surveyed by Bloomberg, with overseas crude inflows climbing to a five-month high. The robust trade data adds to a bullish outlook in Europe, where oil demand has rebounded following months of lockdowns due to the comeback of Covid-19.
The trade figures will “alleviate some of the slowdown fears about China,” said Jeffrey Halley, a senior strategist for Oanda Asia Pacific Pte. “Those numbers may help oil prices stay upbeat for the rest of the session.”
Oil’s rally has run into stiff headwinds over the past couple of months after prices surged almost 50% over the first half of the year. The fast-spreading delta variant of the virus has raised demand concerns, although China was able to swiftly contain its latest outbreak. There are expectations that the market will tighten over the rest of 2021 and OPEC+ is betting that the recovery will accelerate, agreeing last week to keep boosting supply each month.
The market had opened weaker on Monday after Saudi Arabia cut prices of its crude to Asia next month by more-than-expected, catching traders by surprise and raising concerns about the short-term demand picture.
The prompt timespread for Brent was steady at 64 cents a barrel in backwardation — a bullish structure where near-dated contracts are more expensive than later-dated ones. That compares with 60 cents on Monday.
Chinese exports rose 25.6% in dollar terms from a year earlier, while imports grew 33.1%, the customs administration said Tuesday. Manufacturing surveys last week showed a contraction in new export orders for a fourth consecutive month in August, which may signal a slowdown in the future.
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