Brent oil rises to $63.00 on upbeat China factory data

Brent oil rises to $63.00 on upbeat China factory data

Brent oil rises to $63.00 on upbeat China factory data

Crude Oil price rebound in broad market as influence from US EIA crude oil inventory update faded away in the market.

According to the IEA, a sharp fall in Saudi Arabia's output from its record highs ahead of new OPEC/non-OPEC supply cuts along with further unplanned outages in Iran and Libya and a seasonal drop in biofuels wiped 950 kb/d off global oil production in December.

International Brent crude oil futures were up 62 cents, or 1.01 percent per barrel at 0955 GMT.

Fading concerns over trade and monetary policy are helping the market focus on positive developments in the oil market: OPEC seems to mean business in draining a global supply glut and the International Energy Agency expects demand to improve this year.

In the United States, energy firms cut 21 oil rigs in the week to January 18, taking the total count down to 852, the lowest since May 2018, energy services firm Baker Hughes said in a weekly report on Friday.

"By the middle of the year, USA crude output will probably be more than the capacity of either Saudi Arabia or Russian Federation", said the IEA, which kept its estimate of oil demand growth unchanged and close to 2018 levels at 1.4 million barrels bpd.

This year, oil demand growth is expected to stay robust, but expected slowdown in emerging market and developing economies (EMDEs) could have a greater impact on oil demand than expected.

Refiners around the world also face a challenge this year as the industry adds 2.6 million barrels of daily processing capacity, the biggest increase in the records of the agency, which was set up in the 1970s. After closing out 2018 in free-fall, US crude prices have rebounded more than 18 percent to start this year.

OPEC on Friday published a list of new levels of reduction in oil output by its members and other major producers for the six months to June as part of the group's latest production-cutting deal.

The U.S. rig count last week was "the lowest level seen since May 2018", said Warren Patterson, Head of Commodities Strategy at ING.

Crude prices also drive the cost of fuel made at the Marsden Point refinery, and the country's seasonal imports and exports of LPG.

Output cuts planned by the Organization of Petroleum Exporting Countries and its partners should stabilize world markets, though the process will be slow, the IEA said.

EIA forecasts global oil demand to grow by 1.5 million b/d in 2019 and in 2020, with China as the leading contributor in both years.

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