Oil Prices Rise On Solid Chinese Demand

Oil prices rose on Friday morning after Chinese data showed that China’s crude oil imports rose to the second-highest on record in November, and after U.S. total non-farm payroll employment increased last month.

At 10:39 a.m. EST on Friday, WTI Crude was up 0.64 percent at $57.05, and Brent Crude was trading up 0.98 percent up at $62.81.

Chinese crude oil imports increased to 9.01 million bpd last month—the second highest on record, according to data provided by China’s General Administration of Customs.

“The sharp reduction in Saudi Arabian crude oil shipments is not reflected in the Chinese import statistics, meaning that other suppliers such as Russia, Iraq or the U.S. are likely to have stepped into the breach,” Commerzbank said in a note, as carried by Reuters.

In the U.S., total non-farm payroll employment increased by 228,000 in November, and employment continued trending up in professional and business services, manufacturing, and health care, the U.S. Bureau of Labor Statistics said on Friday.

This week, oil prices have been a mixed bag of ups and downs, and on Wednesday they dropped shortly after the Energy Information Administration (EIA) reported a 5.6-million-barrel draw in crude oil inventories for the week to December 1, but a major build in gasoline inventories of 6.8 million barrels. Analysts had expected a smaller build of the fuel.

On the global supply side, according to an S&P Global Platts survey of OPEC and oil industry officials and analysts, OPEC’s production in November dropped by 220,000 bpd from October to its lowest level in six months—to 32.35 million bpd, with declines in oil production in eight out of the fourteen OPEC members.

Rig count data by Baker Hughes later on Friday will likely point the direction in which oil prices will finish this week.

By Tsvetana Paraskova for Oilprice.com