Crude Resumes Upward Trend On Strong China Data

Crude oil rebounded on Tuesday amid believes the US crude inventories fell for the second week in the US, the world’s biggest oil consumer, while China’s upbeat data added to signs that economic growth in the world’s second biggest oil consumer continues to strengthen.

China’s retail sales rose 13.7%, above expectations for a 13.3% rise, while factory output remains firm in line with expectations, suggesting that recovery in the world`s second largest economy is intact heading, which improves the outlook for oil demand.

Data during the weekend showed China’s exports rose more than expected and trade surplus unexpectedly widened, put to rest fears about a hard-landing for the economy, while government reforms are expected to support demand for commodities.

In the US the Energy Information Administration report tomorrow may show crude stockpiles probably shrank by 3 million barrels last week. The American Petroleum Institute is scheduled to release a separate inventory data today.

The focus on the Fed's upcoming meeting is expected to continue dominate sentiment in the coming days. The strong jobs numbers from the US last week could determine the Federal Reserve to start curbing its bond buying program at its next meeting on December 17-18.

Energy markets will also follow the meeting today between members of Libya’s Al Magharba tribe in the country’s east to discuss the reopening of closed oil export terminals, which could weigh on prices. Libya is an OPEC member and holder of Africa’s biggest oil reserves.

Meanwhile, natural gas rose above $4.20 for the first time since May 28, as the cold weather in the US and Europe determines homeowners to turn up the heat. The likelihood of even colder temperatures may provide further support to natural gas prices.

- WTI crude oil futures for January is trading around $ 97.78 a barrel after rising $0.44

- Brent futures for January settlement is trading around $ 109.82 a barrel after rising $0.43

- Natural gas is trading at $ 4.239 per cubic feet after rising 0.17%

- Gasoline is trading at $ 2.6838 per cubic feet after rising 0.33%

- Heating oil (diesel) is trading at $ 3.0243 a gallon after rising 0.33%