Oil Futures pushed up to extend strong gains from the previous week after expectations that the country’s crude production was set to sow down offset signs of growing US stockpiles.
Light, sweet crude for May delivery most recently traded up 50cents or 1% to $52.12 on the New York Mercantile Exchange. Brent futures, the global benchmark advanced 69 cents or 1% to $59 a barrel.
The prices had been down earlier after downbeat economic data from China showed that the world’s second largest economy’s exports slid 15% from 12 months before in March and its imports declined by 12.7%.
The disappointing data sparked concern that oil demand in Asia was tailing off but expectations that the data would force the country to implement stimulus programs that that could boost demand for crude lifted sentiment and helped the prices rebound.
“But the slumbering notion of ‘bad is good’ is awakened once more by dire data out of China, prompting hopes of stimulus measures from the world’s largest energy consumer,” Matt Smith commodity analyst at Schneider Electric, told MarketWatch.
The gains were however capped by data from a data company that US oil inventories continued to grow last week.
Oilfield services provider Genscape Inc reported to clients on Monday that stockpiles in Cushing, Okla., an important storage and delivery point for the benchmark West Texas Intermediate contract, increased by 2 million barrels last week.
Production data from the Energy Information Administration was due later on Monday with output and inventories expected to peak this month and flatten off.
Refiners returning from seasonal maintenance are expected to increase daily demand by about 500,000 barrels a day to help ease the biggest crude glut in more than 85 years.
“We’re starting to see production flatten out and soon should begin to see it decline,” Mike Wittner, the head of oil market research at Societe Generale SA in New York, told Bloomberg by phone April 10. “We’ve seen an incredible drop in the rig count.”
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