Oil steadies near $58 as US rig count offsets Chinese data

LONDON - Brent crude prices steadied near $58 a barrel on Monday as falling U.S. oil rig counts and signs of healthy U.S. 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 percent from a year earlier while imports tumbled 19.9 percent, highlighting a deepening slowdown.

But the falling number of U.S. 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 U.S. jobs in January also helped support oil, as non-farm payrolls increased 257,000, outstripping Wall Street forecasts.

Global benchmark Brent crude oil LCOc1 for March was up 10 cents at $57.90 a barrel by 1118 GMT (06:18 a.m. EST) after rising as high as $59.06 earlier in the session. U.S. crude CLc1 was up 56 cents at $52.25 a barrel, having hit a session high of $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 percent last week, its biggest weekly rise since February 2011. The North Sea oil futures contract has climbed more than 18 percent 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," Wang Tao told Reuters Global Oil Forum. "Both WTI and Brent may correct in this week before seeking their next direction."  — Reuters

Oil prices mixed, eyes on Ukraine crisis

SINGAPORE – Oil prices were mixed in Asian trade Tuesday as investors cautiously watch events in Ukraine, with western powers threatening sanctions against Russia for its military intervention in the region.

The United States said it has suspended defense cooperation with Russia and the UN Security Council began a meeting on the crisis.

US benchmark West Texas Intermediate (WTI) for April delivery, eased 13 cents to $104.79 in mid-morning trade on profit-taking as after hitting its highest levels this year in New York on Monday.

Brent North Sea crude for April climbed two cents to $111.22.

Producing more than 10 million barrels a day in January, Russia vies with Saudi Arabia as the world's largest crude oil producer, and is the second-largest producer of natural gas.

More than 70 percent of its gas and oil exports to Europe pass through Ukraine.

"The Ukraine event is a new catalyst that propped up crude oil prices to form new highs," Phillip Futures said in a market commentary.

"When war erupts, Russia, one of the world's top oil producers, is likely to reduce oil exports due to higher domestic consumption."

It warned that any possible disruption to oil infrastructure could hit production, leading to tighter supplies.

Research house Capital Economics noted that "Europe is heavily dependent on supplies of Russian energy."

Ukraine on Monday accused Russia of pouring more troops into Crimea as world leaders grappled with Europe's worst crisis since the Cold War and global stock markets tumbled on fears of an all-out conflict.

Crimea has been under de facto occupation by Moscow-backed forces since President Vladimir Putin won parliament's authorization on Saturday to send troops into Ukraine. – Agence France-Presse

source: gmanetwork.com