September 15, 2023 (MLN): Oil prices climbed on Friday and are on track for a third consecutive week of gains as China’s record oil consumption and positive economic data boosted the outlook for the world’s second-biggest crude importer.
Brent crude is currently trading at $94.34 per barrel, up by 0.68% on the day.
While West Texas Intermediate crude (WTI) is trading at $90.84 per barrel, up by 0.75% on the day.
To note, both benchmarks are up around 4.15% this week.
China's industrial output and retail sales grew at a faster-than-expected rate in August, suggesting that the recovery of the world's second-largest economy from the COVID-19 pandemic is stabilising, as Reuters reported.
Data from the National Bureau released on Friday also showed oil refinery processing rose to a record 64.69 million tonnes in August, up 19.6% from a year earlier and equal to 15.23 million barrels per day (bpd).
Refining throughput surged as Chinese processors kept run rates high to meet summer travel demand and capitalize on strengthening margins for exporting to Asian consumers.
"Betting on oil is becoming a favorite trade on Wall Street. No one is doubting the OPEC+ (oil-producing nations) decision at the end of last month will keep the oil market very tight in the fourth quarter," said analyst Edward Moya at OANDA.
The record China refining rates are occurring as output cuts by major producers Russia and Saudi Arabia are increasing worries about supply. The supply concerns have pushed both Brent and WTI to their highest since November.
The International Energy Agency said this week it expects Saudi Arabia's and Russia's extended oil output cuts to result in a market deficit through the fourth quarter.
