US & Chinese Data Rally WTI & Brent Oil

Crude oil gained 18 cents on Friday morning to trade at 94.99 climbing steadily since the release of positive economic data from the US. Brent oil added 24 points to climb at 105.17. Traders had a day full of events that kept the commodities markets on a roller coaster. German data helped support the demand for oil. Strong demand for capital goods from the euro zone helped German manufacturing orders rebound sharply in September, as the region’s timid economic upswing fueled demand for ships, rail and aviation equipment. But other euro-zone data published Wednesday indicate that the bloc’s recovery remains fragile. The ECB surprised traders and reduced key lending interest rates by 25bps.

On Wednesday, EIA data showed that crude oil supplies in the US were higher than expected. US commercial crude inventories increased by 1.6 million last week. This rise maintains a total US commercial crude inventory of 385.4 million bbls, which remains above the upper limit of the fiver year average for this time of year. Gasoline inventories decreased last week by 3.8 million bbls but are still in the upper half of the five year range. Motor gasoline supplied averaged over 9.1 million bpd over the past week, up 200 000 bpd from the previous weekly average and up 5.4% year on year. Distillate inventories fell last week by 4.9 million bbls to the lower end of the five year range. Distillate product supplied averaged over 3.9 million bpd over the last four weeks. Distillate production reached over 4.9 million bpd last week, flat with the previous week. S oil prices had already risen on Wednesday as official data revealed a smaller-than-expected increase for US crude inventories. WTI prices came off five-month low points — the results of a steady climb in US commercial inventories since September. 
The Department of Energy said that US crude inventories grew by 1.6 million barrels last week, less than expectations for a rise of 1.9 million. 

Brent oil hit four-month lows, as talks with Iran that could lead to lifting sanctions opened and US growth data showed some consumer weakness. Negotiators from Iran and six world powers met on Thursday to broker a deal that could see Tehran freeze its disputed nuclear programme in exchange for some relief from sanctions – including allowing it to sell more oil on the open market. A senior State Department official said the US delegation had met with the Iranians for about an hour and had “a substantive and serious conversation”.

This morning’s data release showed that Chinese exports printed much higher than expected helping to increase the demand for oil, pushing prices upward. This compounded with US GDP printed above expectations coming in at 2.8% against forecast of 2.0%.