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Oil bounces as China, US data ease recession worries

FILE PHOTO – An oil field worker works at a pump jack in PetroChina’s Daqing oil field in northeast China’s Heilongjiang province November 5, 2007. REUTERS/Stringer (CHINA)

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SINGAPORE, Aug 8 (Reuters) – Oil prices jumped higher from multi-month lows on Monday as investor appetite improved after U.S. jobs data and Chinese export data eased recession worries.

Brent crude futures had risen 81 cents, or 0.9%, to $95.73 a barrel by 0638 GMT. US West Texas Intermediate crude was at $89.76 a barrel, up 75 cents, or 0.8%.

Both contracts settled higher on Friday after job growth in the US, the world’s biggest oil consumer, unexpectedly accelerated in July. On Sunday, China also surprised the markets with faster than expected export growth. read more

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Signs of weak demand in US inventories last week had encouraged trades based on a weakened outlook, said Stephen Innes, chief executive of SPI Asset Management. But the job and export data had reversed that view somewhat, he added.

First-month Brent prices last week hit their lowest levels since February, falling 13.7% and posting their biggest weekly drop since April 2020, while WTI lost 9.7%, as concerns about a recession hitting oil demand weighed on prices.

China, the world’s biggest crude importer, imported 8.79 million barrels per day (bpd) of crude in July, up from a four-year low in June but still 9.5% less than a year earlier, customs data showed.

Chinese refiners drew down inventories due to high crude prices and weak domestic margins, even as the country’s overall exports picked up. read more

Reflecting lower US petrol demand, and as China’s zero-Covid strategy pushes recovery further out, ANZ lowered its oil demand forecasts for 2022 and 2023 by 300,000 bpd and 500,000 bpd respectively.

Oil demand for 2022 is now projected to rise by 1.8 million barrels per day year-on-year to settle at 99.7 million barrels per day, just below pre-pandemic highs, the bank said.

Exports of Russian crude oil and oil products continued to flow despite an impending embargo from the European Union that will take effect on December 5. read more

In the US, energy companies last week cut the number of oil rigs by the most since September. It was the first drop in 10 weeks.

The US clean energy sector got a boost after the Senate on Sunday passed a sweeping $430 billion bill meant to combat climate change, among other things. read more

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Reporting by Florence Tan; Editing by Gerry Doyle and Bradley Perrett

Our standards: Thomson Reuters Trust Principles.

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