Forexpros – Crude oil futures edged higher on Thursday, recouping some of the previous day’s losses amid signs of strong oil demand from the U.S. and China, while markets continued to eye developments surrounding Italy’s debt crisis.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD96.81 a barrel during European morning trade, gaining 1.1%.
It earlier rose by as much as 1.25% to trade at a daily high of USD96.94 a barrel.
Official trade data released earlier showed that China imported 20.8 million tonnes of crude in October, equivalent to 4.92 million barrels a day.
Oil imports were 26.9% higher than the 16.4 million tons of crude imported during the same month last year, and 1.7% higher than 20.45 million tons imported in September.
China is the world’s second largest consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, weekly data from the U.S. Energy Information Administration released Wednesday showed that U.S. crude oil inventories fell by 1.4 million barrels last week, confounding expectations for a 0.5 million barrel increase.
Total motor gasoline inventories decreased by 2.1 million barrels, outstripping expectations for a 0.4 million barrel drop, easing concerns over a slowdown in demand from the world’s largest oil consumer.
Mounting concerns over Italy’s debt crisis limited gains after the yield on 10-year Italian government bonds rose above 7% on Wednesday, the level at which Greece, Ireland and Portugal sought international bailouts.
Yields eased slightly to 7.12% on Thursday, amid speculation the European Central Bank was purchasing Italian debt. Later in the day, the country was to auction up to EUR5 billion of one-year government bonds, in what will be a key test of market appetite for the country’s debt.
Meanwhile, the International Energy Agency said in a report Wednesday that it saw the potential for crude prices to trade at USD150 in the near-term if investment in the Middle East and North Africa oil-producing region falls significantly.
In its annual energy outlook, the IEA said that, “If between 2011 and 2015 investment in the MENA region runs one-third lower than the USD100 billion per year required, consumers could face a near-term rise in the oil price to USD150 per barrel.”
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery rose 0.7% to trade at USD113.11 a barrel, with the spread between the Brent and crude contracts narrowing to USD16.30 a barrel.
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