Brent Crude Heading to $70 as The Outlook For Chinese Energy Demand Improves

Oil prices rose today, and Brent is heading towards the level of seventy dollars a barrel, as data show the acceleration of the Chinese economic recovery at the beginning of 2021, which supports the energy demand of the largest importer of oil in the world.

Brent crude for May delivery rose 47 cents, or 0.7%, to $ 69.69 a barrel in Asian trading, while US West Texas Intermediate crude for April delivery reached $66.10 a barrel, up 49 cents, or 0.8%.

Data showed that Chinese industrial output growth accelerated in January and February, exceeding expectations, while refinery production rose 15% compared to the same period a year ago.

Chinese heavy industries have witnessed strong growth, as its production of cement, steel and aluminum recorded double-digit growth compared to 2019 levels before the Covid pandemic, said Singh Yekti, an analyst at the Chinese consulting firm Sia Energy, adding that the growth rates were violent considering the foundations of large China.

He said that producing and shipping all these materials takes energy.

Adding to the price increase in support, sources in the refining sector told Reuters on Friday that Saudi Arabia, the largest oil exporter, has reduced crude supplies from April loading to at least four North Asian buyers by as much as 15%, while meeting the normal monthly requirements of Indian refiners.

The supply cut comes as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC+, decided earlier this month to extend most of their supply cuts for April.