Oil rebounds as strong China data offsets supply concerns

Oil prices rebounded on Tuesday, drawing support from robust China data, although concerns about waning demand elsewhere and supply resumptions in Norway, the Gulf of Mexico and Libya weighed.

Brent crude futures rose $0.6, or 1.4%, to $42.32 a barrel by 0916 GMT. US West Texas Intermediate (WTI) crude futures rose $0.63, or 1.6%, to $40.06 a barrel.

China, the world’s top crude oil importer, took in 11.8 million barrels per day (bpd) of oil in September, up 5.5% from August and 17.5% from September last year, customs data showed on Tuesday.

“Currently, oil demand is driven primarily by China,” Commerzbank said.

The International Energy Agency (IEA) – which advises Western governments on energy policy – said in its World Energy Outlook that in its central scenario a vaccine and therapeutics could mean the global economy rebounds in 2021 and energy demand recovers by 2023. But under a “delayed recovery scenario”, the timeline is pushed back two years, it said.

“The era of global oil demand growth will come to an end within the next 10 years, but in the absence in a large shift in government policies, I don’t see a clear sign of a peak,” IEA chief Fatih Birol told Reuters.

Lockdown measures were being tightened in Britain and the Czech Republic to battle rising cases of Covid-19, and French Prime Minister Jean Castex said he could not rule out local lockdowns.

Oil prices are also facing pressure from the supply side.

Workers have been returning to the US Gulf of Mexico platforms after Hurricane Delta and Norwegian workers to offshore rigs there after ending a strike, while OPEC member Libya on Sunday lifted force majeure at its Sharara oilfield.

Libya’s total output on Monday was expected to hit 355,000 bpd. A full return of the 300,000-bpd Sharara field would nearly double that.