Oil prices rise after robust China import data

Oil prices rose on Tuesday after strong Chinese import data but markets broadly shrugged off Middle East tensions which have so far not disrupted oil supply.

Brent crude oil futures were up $0.61, or 1%, at $63.89 a barrel by 1221 GMT while US crude oil futures gained $0.53, or 0.9%, to $60.23 a barrel. Both contracts have recorded changes of less than 1% for four straight sessions.

China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide Covid-19 vaccinations, while import growth surged to the highest in four years.

Crude oil imports into China jumped 21% in March from a low base of comparison a year earlier as refiners ramped up operations.

Organisation of the Petroleum Exporting Countries (OPEC) in its monthly report on Tuesday raised its forecast for 2021 oil demand growth by 70,000 to 5.95 million barrels per day (bpd), or 6.6%.

Also supporting prices, US crude oil stockpiles were expected to have fallen last week for a third straight week, while distillate and gasoline inventories likely grew, a preliminary Reuters’ poll showed on Monday.

Still, US oil output from seven major shale formations is expected to rise for a third straight month, the US Energy Information Administration said on Monday.

Yemen’s Houthi movement said on Monday it had fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Saudi Aramco facilities in Jubail and Jeddah.

“The rise in geopolitical tension will only have a notable bullish impact on oil prices if it is coupled with actual physical supply disruption,” PVM analysts said in a note.

The slow rate of vaccinations in Europe and anticipation of additional supply of oil from Iran in the coming months capped price gains.