US crude prices rise sharply on strong demand

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US crude prices rose sharply on Thursday, supported by strong gasoline demand in the world’s top oil consumer.
Crude prices have fallen more than 3 percent this week on persistent worries over global demand and a supply glut, sparking some profit taking, traders said.
Overall US crude stocks rose last week more than expected but inventories at the Cushing, Oklahoma, delivery hub for the US West Texas Intermediate (WTI) benchmark, declined, data from the Energy Information Administration showed.
Gasoline consumption, a major driver in global oil demand growth over the past year, rose over the past four weeks by 3.8 percent from a year earlier, offering further support.
Brent crude futures rose 65 cents to $48.23 per barrel by 1530 GMT. US crude futures were up $1.07 at $45.22 a barrel.
“The (US) data was moderately bearish with bigger than expected builds across the board for oil and refined products stocks. Offsetting some of this bearishness was demand, which remains strong year-over-year as consumers take advantage of low gasoline and distillate prices,” said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
Japan’s core machinery orders fell 3.6 percent in July, data showed on Thursday, much worse than a 3.7 percent increase expected by economists.
In Asia’s biggest economy, China, the producer price index fell 5.9 percent in August from the same period last year, its 42nd consecutive month of decline and the biggest drop since the depths of the global financial crisis in late 2009.
Car sales in China fell 3.0 percent in August from a year earlier to 1.7 million vehicles, the fifth straight monthly drop as the country’s slowest economic expansion in 25 years wiped out growth in the world’s top auto market.
ANZ bank said global growth for 2016 and 2017 would hold around 3.5 percent, revised down from the 4 percent it had previously forecast.
“The stage is set for a recovery but as long as we keep getting disappointing numbers out of China it will weigh and delay a recovery,” said Hamza Khan, commodities analyst at Netherlands-based ING Financial Markets.
Oil prices have fallen over 50 percent since June 2014 as soaring output clashed with slowing economies in Asia, the main growth engine for commodities in recent years.

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