Oil rises by nearly 2 percent on stronger Chinese demand

Oil prices rose by almost 2 percent on Friday, helped by rising Chinese crude demand and threats of a strike in Africa’s largest oil exporter.

But US prices fell 1.7 percent during the week while Brent prices fell 0.5 percent amid concerns that rising US production could undermine supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

Brent crude settled up $1.20 or 1.9 percent at $63.40 a barrel.

US West Texas Intermediate (WTI) crude settled up $57.36 a barrel, up 67 cents or 1.2 percent.

China’s crude oil imports rose to 9.01 million barrels per day (bpd), the second-highest on record, data from the General Administration of Customs showed.

“We have good numbers out of China,” said John Macaluso, an analyst at Tyche Capital Advisors. “A lot of the extra imports are not from Saudi Arabia. Iran, Russia and the US are some of the countries picking up the slack.”

Booming demand will push China ahead of the US as the world’s biggest crude importer this year.

US investment bank Jefferies forecast 2018’s global oil demand growth to stand at 1.5 million bpd, driven by an almost 10 percent demand growth in China.

“Generally speaking, the market is looking more healthy than sick,” said Tamas Varga, analyst at PVM Oil Associates.

Varga said the threat of a strike later this month from a union in Nigeria, Africa’s largest oil exporter, was supportive.

An extension of production cuts to the end of 2018 by the OPEC, Russia and other producers underpinned the market. The output cuts pushed oil prices higher between June and October, with Brent gaining around 40 percent.