Brent crude hits $70 as China energy demand outlook brightens

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Brent crude hits $70 as China energy demand outlook brightens

Oil prices rose on Monday, with Brent reaching $70 a barrel, as data showed China’s economic recovery accelerated at the start of 2021, boosting the energy demand outlook at the world’s largest oil importer.

Brent crude futures for May was up 10 cents, or 0.1%, at $69.32 a barrel, while U.S. West Texas Intermediate crude for April was at $65.73 a barrel, up 12 cents, or 0.2 percent.

China’s industrial output growth quickened in January-February, beating expectations, while its daily refinery throughput data rose 15% from the same period a year earlier, data showed.

Energy analyst at China consultancy, SIA Energy, Seng Yick Teeh, said the heavy industry in the world’s top crude importer has shown robust growth as its output of cement, steel, coal, and aluminum registered double-digit growth compared with pre-COVID pandemic levels.

He noted that the growth rates were insane, noting that producing and transporting all these materials require energy.

Further supporting prices, top oil exporter, Saudi Arabia has cut the supply of April-loading crude to at least four north Asian buyers by up to 15%, while meeting the normal monthly requirements of Indian refiners.

The supply cuts come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, decided earlier this month to extend most of its supply cuts into April.

In February, the United States overtook Saudi Arabia to be India’s second-largest supplier, data from trade sources showed.

In the United States, oil refiners’ weekly capacity was seen up 1.6 million barrels per day, research company IIR Energy said on weekend, as more plants resumed operations following outages during the severe winter storm in Texas last month.

Separately, U.S. energy firms have cut the number of oil and natural gas rigs operating by one in the first weekly drop since November, according to Baker Hughes Co.

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