Brent holds steady above US$108

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BRENT crude held steady around US$108 a barrel yesterday as a surprisingly strong reading on Chinese manufacturing bolstered hopes for higher demand in the world’s No.2 oil consumer.

China’s factory sector expanded at its fastest in 18 months in July, as a raft of government stimulus measures kicked in, a preliminary HSBC survey showed yesterday.

“China is a big commodities player, and this is definitely positive for oil,” said Avtar Sandu, senior commodities manager at Phillip Futures in Singapore.

Brent crude for September delivery traded down 14 cents at US$107,89 a barrel by 07h01 GMT, after closing 70 cents higher on Wednesday. US crude was down 20 cents at US$102,92, after gaining 73 cents in the previous session.

Prices pushed higher on Wednesday after US government data showed crude stocks fell 4 million barrels last week. Analysts had expected a decrease of just 2,8 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub for US benchmark oil fell 1,5 million barrels, data from the Energy Information Administration showed.

A build of five million barrels in combined inventories of gasoline and distillates, however, raised questions about demand.

US crude’s discount to Brent dropped as low as US$4,51 on Wednesday, near a three-month low, as high domestic refinery utilisation rates signalled strong near-term demand for crude oil.

The spread had widened to US$4,91 a barrel by the end of the day as traders covered short positions ahead of the close, and was at US$5,14 a barrel yesterday.

US CONDENSATE EXPORTS

Japanese and South Korean oil refiners have purchased the first condensate cargoes to be exported from the United States since the easing of a 40-year ban on US crude exports, industry sources familiar with the matter said yesterday.

Amid booming shale oil production, the United States recently softened a total ban on crude exports in place since the Arab oil embargo of the 1970s.

From:
http://www.namibian.com.na/indexx.php?id=15762&page_type=story_detail

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