Picture: 123RF/EVGENI BASHTA
Picture: 123RF/EVGENI BASHTA

London — Oil prices rose slightly on Friday as concern over an economic slowdown in China, the world’s biggest oil consumer, was countered by bullish signals from both the Chinese and US refining sectors.

Erasing earlier losses, global benchmark Brent crude oil futures rose 10c to $60.01 a barrel by 9.27am GMT. US West Texas Intermediate (WTI) crude futures edged up by 26c to $54.19. Both contracts were on track for weekly declines of less than 1%.

In the third quarter, China’s economic growth slowed to 6% year-on-year, its weakest for 27 and a half years and below expectations, dogged by soft factory production amid sluggish domestic demand and continuing trade tensions with the US.

China’s September refinery throughput, however, was up 9.4% year-on-year at 56.49-million tonnes, boosted by new refineries and some independent refiners resuming operations after maintenance.

US and Chinese trade negotiators are working on nailing down a phase one trade deal text for their presidents to sign next month, US treasury secretary Steven Mnuchin said on Wednesday.

In the US, falling product stocks countered higher US crude oil stocks, which rose by 9.3-million barrels in the week to October 11. That compared with expectations for an increase of 2.9-million barrels.

“The actual key takeaway from the report was that the US is edging closer to energy independence,” PVM analysts said in a note. “The country was a net exporter for crude and refined products for a second consecutive week for the first time on record.”

Elsewhere, the joint technical committee monitoring a global oil production pact between oil cartel Opec and partners found that compliance is being exceeded, with cuts for September representing 236% of agreed quotas, sources said.

Opec and its allies, including Russia, have agreed to limit oil output by 1.2-million barrels per day (bpd) until March 2020.

Opec lowered its 2019 global oil demand growth forecast to 0.98-million bpd while leaving its 2020 demand growth estimate unchanged at 1.08-million bpd, its latest monthly report said.

Reuters