China’s GDP expanded in the fourth quarter by 10.7% from a year earlier, after a revised 9.1% in the third quarter from the originally reported 8.9%, where the actual reading came better than expectations of 10.5%.
Those figures insure overall improvement in the Chinese economy, despite of the critical economic situation that the global economy faced with the deepest credit crisis since the Great Depression. Furthermore, most economists expect China's economy to be the leading economy in driving global growth to recovery; therefore, it may be interpreted positively on oil prices since China is one of the major industrial countries.
The Chinese government intensified its efforts to try to build a sufficient oil reserve, where most expectations see that oil demand could grow throughout the current year, giving prices impetus to gain. Crude contracts for March delivery rose yesterday to levels near $79 per barrel.
In addition, China's government has attempted to avoid higher inflation levels by curbing lending, with a new legislation on national banks to reduce the size of credit, after debts inflated to about 9.59 trillion Yuan last year.
Meanwhile, the S&P GSCI index closed last night at 515.22 after declining by 7.732 points; while, the S&P GSCI energy index fell by 4.24 points to close at 259.45.
Today’s weekly EIA report, which was delayed due to the early week Martin Luther King Day celebrations is expected to report a further rise in US inventories.
Crude stockpiles are expected to had added 2.2 million barrels following last week’s buildup of.7 million barrels; therefore, pointing out the ongoing weakness of demand levels in the U.S, especially after the weather started to growth warmer, which has caused inventories to increase and thus negatively reflecting on oil prices.
In NYMEX last night, heating oil futures inclined to $2.02 levels per gallon by 0.44 cents; motor gasoline traded around $2.044 per gallon after falling by 0.28 cents; whereas natural gas contracts rose by 1.3 cents to record $5.509 per 1000 cubic feet. Meanwhile, in London Brent contracts rose by 1 cent to record $76.33.
Crude oil contracts opened today at $77.50 per barrel to record the highest at $78.17 and lowest at $77.50 per barrel, currently trading around $77.80 per barrel.