Oil futures bounced Tuesday, taking back the previous day’s slide, after data showed a jump in Chinese crude imports.
West Texas Intermediate crude for November delivery rising 86 cents, or 2.2%, to $40.29 a barrel on the New York Mercantile Exchange. The global benchmark, December Brent crude, jumped 80 cents, or 1.9%, to $42.52 a barrel on ICE Futures Europe.
“Chinese crude oil imports rose to the equivalent of 11.8 million barrels per day in September, putting them 2% up on the previous month. The anticipated cooling following the buying spree in the (early) summer has yet to materialize, in other words,” said Carsten Fritsch, analyst at Commerzbank, in a note. “Chinese crude oil imports were 12.7% up year-over-year in the first nine months.”
Fritsch argued the strong Chinese demand is unlikely, however, to offset a range of bearish factors over the longer run.
These include a sharp jump in Libyan crude production as its largest oil field comes back online, which could double the country’s crude production to 650,000 barrels a day within a few weeks, he said. The end of a Norwegian oil strike and the return of production in the Gulf of Mexico were also credited for Monday’s crude selloff.