|News||Crude trades above $83 on Chinese demand|
|Analysis||Crude contracts ascended throughout the Asian session today above $83 per barrel, supported by signs that reflected rising Chinese demand on crude. In addition to attacks on oil pipelines running through the Nigerian delta by an unidentified armed group.|
The Chinese government yesterday reported that its yearly imports of crude have risen 14% throughout last year to a record 203.8 million metric tons. This gain in yearly imports comes after imports had risen by 56% on December.
Chinese which were beyond expectations managed to support the continued optimism over stronger crude demand, after US data, released last Friday were rather disappointing. In the United States 85,000 employees lost their jobs in December, while unemployment rates stood at 10% and therefore reflecting the weak jobs market that will have a negative impact on consumption and demand; thus, impeding the expected economic recovery.
Furthermore, Chevron’s oil pipeline (one of the largest crude oil companies in the world), which passes through the Nigerian delta, has been attacked last Friday by an unidentified armed group. This played a role in reducing production levels by 20,000 barrels per day, intensifying the political tension and fears over further attacks to be seen which has in fact posed a threat on crude before and therefore supporting prices upside bias.
The S&P GSCI index ended on Friday at 543.22 levels gaining 0.635 points; where the energy S&P GSCI index closed at 276.33 after rising by 0.46 points. Crude contracts last month rose by 20% due to the cold weather dominating vast regions of the US, Europe and China, supporting demand on heating fuel causing it to gain by 19% since mid December.
On the other hand, Heating Oil Futures on NYMEX for February delivery rose to record $1.97 per gallon higher by 2.22 cents, while motor fuel gained by 1.95 cents to record $2.18 per gallon; whereas natural gas contracts dropped by 16.4 cents to close at $5.59 per 1000 cubic feet. As for London trades, Brent contracts for February delivery rose by 69 cents to record $81.06.
We expect narrow trades for today due to the lack of major economic data. Crude contracts for February delivery opened today at $82.75 per barrel, recording its highest at 83.65 and lowest at $82.75 per barrel, while currently trading around $83.45 per barrel.
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