Seoul - Oil extended gains above $46 a barrel in New York after China’s economic growth in the second quarter slightly surpassed expectations.
Futures added 0.3% in New York, after rising 5.2% last week. The world’s second-largest economy expanded by 6.9% from a year earlier, compared with the 6.8% median estimate in a Bloomberg survey. US drillers targeting crude added two rigs last week, the smallest increase since May, data from Baker Hughes showed on Friday.
While oil advanced last week, prices in New York are still below $50 a barrel on concerns expanded global supplies will offset output curbs by the Organisation of Petroleum Exporting Countries and its allies. The group’s output climbed last month to the highest this year as members exempt from the deal - Nigeria and Libya - pumped more and others slipped in delivering their pledged curbs.
“Macro data in China point to renewed growth momentum in June, following a somewhat sluggish April and May,” said Jan Edelmann, an analyst at HSH Nordbank in Frankfurt.
American drilling
West Texas Intermediate for August delivery was at $46.68 a barrel on the New York Mercantile Exchange, up 14 cents, at 10:52. Total volume traded was about 24% above the 100-day average. Prices gained $2.31 to $46.54 a barrel last week.
Brent for September settlement climbed 17c to $49.08 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 4.7% last week. The global benchmark crude traded at a premium of $2.20 to September WTI.
The number of active oil rigs in the US rose to 765, according to Baker Hughes data reported on Friday. It’s the second week of renewed growth after drillers snapped a 23-week stretch of advances at the end of June. Shale explorers have been the driving force behind a surge in US production, more than doubling the rig count from a low of 316 in May 2016.
Oil-market news:
China is on pace to produce the least amount of oil this year since 2009 as a bear market weighs on domestic drilling. OPEC’s implementation of output cuts dropped to 92% in June from 110% in May, according to a person familiar with the matter.
Hedge funds increased their WTI net-long position by 19% to 178 654 futures and options over the week ended July 11, the sharpest increase in seven weeks, according to data from the US Commodity Futures Trading Commission.
US imports of Saudi Arabian crude - usually medium or heavy grades - “slowed substantially” over the past five months as the Middle East nation reduced output of those varieties compared to lighter oil, analysts at Bank of America Merrill Lynch said in a note.
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