Oil up above $102 after China GDP data
Brent crude oil futures were up $1.29 to $102.36 a barrel by 1014 GMT. U.S. crude was up 77 cents at $86.85.
Analysts and traders said the market was staging a mini relief rally as the Chinese second-quarter GDP data was not as bad as some had feared.
"The headline GDP print of 7.6 percent was far from jaw-dropping stuff," said Tim Waterer, senior trader at CMC Markets, in a report. "However, it was a case of small mercies for the market, with risk assets able to claw back some ground."
Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt, noted that the fixed asset investment number was also quite robust. "So it looks like there is less prospect of a hard landing and fewer concerns now about a sharp economic slowdown."
Despite the relief, China is growing at its slowest pace since 2009 as the economies of two of its biggest markets, the European Union and the United States, remain weak.
Harry Tchilinguirian, an analyst at BNP Paribas, pointed out that industrial production was still relatively tepid and there were disappointing figures for electricity output, which is a useful guide to manufacturing sector activity.
"So prices are up, but by less than what they could have been," he said. "In a sense they are just recovering back to the levels we had last week."
Olivier Jakob, an oil analyst at Petromatrix, was also cautious. "Given that the GDP number is controlled by the state, we are more worried about the data for power demand in China, which in June is flat versus last year and comes after very weak numbers for April and May."
China's implied oil demand for June was down 0.4 percent year-on-year, contracting for the third time in three months as refineries scaled back production. It burned 8.96 million barrels of oil per day (bpd) last month, the lowest since October 2010.
PRESSURE ON IRAN
Analysts also cited moves by the United States to crack down on Iran's ability to export oil, identifying Tehran's main tanker firm and exposing dozens of its vessels as government-controlled entities.
"They have more or less given everyone a map as to how the Iranians are trying to confuse the market," said Filip Petersson, commodity strategist at SEB Commodity Research. "So now it will be more difficult for the Iranians to disguise the origin of their crude."
The measures underpin U.S. and EU sanctions designed to deprive Iran of oil revenue and pressure it into curbing its nuclear program, which Tehran maintains is solely for peaceful purposes but which the West believes is for weapons development.
Problems at the North Sea Buzzard oil field earlier this week mean that North Sea oil exports are expected to fall to a new 2012 low in August. [ID:nL6E8ID5B6] This is despite the fact that Buzzard is now pumping normally again.
Source: http://www.ibtimes.com
