Oil Advances As China's Data Beat Estimates As US Stockpiles Rise

After the world's second largest energy consumer posted better-than-expected trade numbers, the outlook for demand on oil improved, pushing crude prices higher for the first time in three days around the $93.50 level.

China's exports grew more than three times the forecast rate by 14.1% while imports advanced more than twice the expected rate, pushing the country's trade surplus to $31.6 billion in December from $19.6 billion in November.

China's General Administration of Customs showed on Thursday that the nation's crude oil imports rose 6.8% in 2012 from the previous year, confirming the growth in oil demand from the world`s second largest economy.

“This is positive for commodities including oil demand. We continue to see outperformance for China through the first quarter as this cyclical recovery continues, but improved external demand would add to this bullishness,” said Jeremy Friesen from Societe Generale Hong Kong.

Crude oil is trading as of this writing around the $93.50 a barrel, after rising about 0.43% today or 40 cents, while Brent is trading around $111.92 after rising 0.14% or 16 cents. Natural gas rose 2 cents to 3.133 while gasoline is flat at $2.7788 while heating oil is trading at $3.0769.

Preventing oil prices from rising further was the US Energy Department report that showed a rise in crude stockpiles by 1.3 million barrels last week, showing that demand remains modest in the United States.

Gasoline stockpiles climbed for a seventh week to 233 million barrels, the highest since February 2011, while distillate inventories increased 6.8 million barrels, the most since May 1997, versus a forecast gain of 1.9 million.

Gains are also limited because of the caution triggered by the earnings season and ahead of the monetary policy decisions from the European central bank and Bank of England, but most importantly the cues on Europe's outlook from ECB's President Mario Draghi speech later in the day.

Markets will also follow any decisions made by BoJ and any developments on the US debt ceiling as well as the US's initial jobless claims numbers which may offer some hints on the health of the world's biggest energy consumer.

“Oil markets are waiting for economic events later in the day. The dollar is on the rise again and U.S. employment statistics also will be in focus,” said Ryoma Furumi from Newedge, Tokyo.