Picture: REUTERS
Picture: REUTERS

London — Oil prices rose slightly on Monday as Chinese industrial output and retail data topped expectations but gains were capped by overall figures showing the country’s slowest quarterly economic growth in decades.

Brent crude futures rose 40c, or 0.6%, to $67.12 a barrel by 9.23am GMT, while US crude was up 19c, or 0.32%, at $60.40 a barrel.

Both contracts last week posted their biggest weekly gains in three weeks on cuts in US oil production and diplomatic tension in the Middle East.

Asian and early European trading was boosted by the more positive Chinese economic data, which may indicate early success in government stimulus efforts and potentially more oil demand in the world’s second-largest economy.

ANZ analysts said China’s crude oil imports year-to-date still looked impressive, even as imports fell in June for a second consecutive month.

“We believe additional crude oil quota [given] to private refiners should keep imports upbeat in the second half of 2019,” they said.

China’s crude oil throughput rose to a record of 13.07-million barrels a day in June, up 7.7% from a year earlier, following the start-up of two new, large refineries, official data showed on Monday.

Still, economic growth of just 6.2% in the second quarter of 2019 — the worst in 27 years — signalled the effect of trade tension with Washington and raised the possibility that more incentives might be needed to jump-start the economy.

Despite a truce agreed between the Chinese and US presidents in June, the trade war remains unresolved.

The Paris-based International Energy Agency said in its monthly report on Friday that abundant output and sluggish growth would leave oil markets oversupplied going into 2020.

“As far as 2019 is concerned, the more cautious demand stance is now well established in the market and across most forecasters,” consultancy JBC Energy said in a note.

Refineries in the path of Tropical Storm Barry continued to operate, although the storm has slashed US Gulf of Mexico crude output by 73%, or 1.38-million barrels a day.

In the Middle East, Iranian President Hassan Rouhani said in a televised speech on Sunday that Iran is ready to hold talks with the US if Washington lifts sanctions and returns to the 2015 nuclear deal it quit 2018.

Meanwhile Britain has offered to facilitate the release of the detained Iranian oil tanker Grace 1 if Tehran gives guarantees that it would not go to Syria.

Reuters