Oil Prices Boosted by Chinese Crude Demand

By Christopher Alessi Features Dow Jones Newswires

Oil prices rose Friday, supported by elevated geopolitical tensions and data showing an increase in Chinese crude imports.

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Light, sweet crude for January delivery advanced 67 cents, or 1.2%, to $57.36 a barrel, on the New York Mercantile Exchange. Brent, the global benchmark, rose 33 cents, or 0.5%, to $63.40 a barrel.

Prices were buoyed by official Chinese customs data released Friday, showing crude imports rose in November to over 9 million barrels a day, up from 7.3 million barrels a day the month before, according to Giovanni Staunovo, commodity analyst at UBS Wealth Management.

Mr. Staunovo said crude prices, which had fallen to a three-week low on Wednesday, were also on the upswing because of "positive equity markets around the world."

The Chinese import data for November represents the second-highest monthly figure on record, while crude imports rose by 12% year-over-year during the first 11 months of 2017, according to analysts at Commerzbank.

"Consequently, China will supersede the U.S. as the world's largest crude importer this year," the analysts wrote in a note Friday.

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Geopolitical tensions in the Middle East -- including President Donald Trump's decision to recognize Jerusalem as the official capital of Israel and the death of former Yemeni President Ali Abdullah Saleh -- also helped to lift prices on Thursday and Friday, analysts said.

"Speculation that there might be some problems in the region" that could lead to supply disruptions has supported crude prices, Ehsan Ul-Haq, director for crude oil and refined products at consultancy Resource Economist Ltd.

The shifting factors behind prices comes just over a week after the Organization of the Petroleum Exporting Countries agreed with other major producers, including Russia, to extend a deal to hold back nearly 2% of crude output through the end of next year. The accord, first adopted a year ago, was meant to rein in a global oil supply glut and boost prices.

The deal initially failed to have much impact on the market. But stronger compliance with the production cuts in the second half of the year, along with a renewed geopolitical risk premium and strengthening demand, has helped raise prices by more than 20% since September.

Gasoline futures gained 1.4%, to $1.7166 a gallon, and diesel futures rose 0.6%, to $1.7166 a gallon.

--Stephanie Yang contributed to this article.

Write to Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

December 08, 2017 16:09 ET (21:09 GMT)