Oil prices rose to their highest for 2019 on Monday after data showed refinery processing in China, the world’s second-largest oil consumer, climbed to a record in 2018, despite a slowing economy last year.
Prices are further being supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), analysts said.
International Brent crude oil futures LCOc1 were at $62.94 per barrel at 0404 GMT, up 24 cents, or 0.4 percent, from their last close. Brent earlier rose above $63 for the first time in 2019.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $54.05 a barrel, up 25 cents, or 0.5 percent. It was the first time this year that WTI rose above $54 a barrel.
Traders said the price rises came after data released by China’s National Bureau of Statistics on Monday showed crude oil refinery throughput climbed to record 603.57 million tonnes in 2018, or 12.12 million barrels per day (bpd), up 6.8 percent from the previous year.
The strong oil demand figures came despite China’s 2018 economic growth slowing to the weakest in 28 years, at 6.6 percent versus 6.8 percent in 2017.
Although the slowdown was in line with expectations and not as sharp as some analysts had expected, the cooling of the world’s second-largest economy casts a shadow over global growth.
“The global outlook remains murky, despite emerging positives from a dovish Fed (now boosting U.S. mortgage applications), faster China easing (China credit growth stabilizing) and a more durable U.S.-China truce,” U.S. bank J.P. Morgan said in a note.
Despite this, analysts said supply cuts led by OPEC would likely support crude oil prices.
“Brent can remain above $60 per barrel on OPEC+ compliance, expiry of Iran waivers and slower U.S. output growth,” J.P. Morgan said.
It recommended investors should “stay long” crude oil, referring to buying futures in the expectation that prices will rise.
Researchers at Bernstein Energy said the supply cuts led by OPEC “will move the market back into supply deficit” for most of 2019 and that should cause prices to rise to $70 a barrel before the end of the year.
In the United States, energy firms cut the number of rigs drilling for oil by 21 in the week to Jan. 18, taking the total count down to 852, the lowest since May 2018, energy services firm Baker Hughes said in a weekly report on Friday.
It was biggest decline since February 2016, as drillers reacted to the 40 percent plunge in U.S. crude prices late last year.
However, U.S. crude oil production C-OUT-T-EIA still rose by more than 2 million bpd in 2018, to a record 11.9 million bpd.
With the rig count stalling, last year’s growth rate is unlikely to be repeated in 2019, although most analysts expect annual production to average well over 12 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
Reporting by Henning Gloystein; editing by Richard Pullin and Christian Schmollinger
Trump’s Commerce Dept plagued by low morale and ‘disarray’ as chief Wilbur Ross falls asleep in meetings: report
For months, there has been speculation in Washington, D.C. that Wilbur Ross, secretary of the U.S. Department of Commerce for the Trump Administration, is on his way out. Reports that Ross falls asleep in meetings don’t exactly instill confidence in his leadership. And Politico’s Daniel Lippman, in a troubling report, describes the Commerce Department as being in a state of chaos and disorganization.
Lippman reports that according to his sources, the 81-year-old Ross “spends much of his time at the White House” in order to “retain President Donald Trump’s favor.” And the Commerce Department is suffering, Lippman observes, because of Ross’ “penchant for managing upward at the expense of his staff.”
When radioactive wastes aren’t radioactive wastes
The U.S. Department of Energy wants to redefine what constitutes high-level radioactive waste, cutting corners on the disposal of some of the most dangerous and long-lasting waste byproduct on earth—reprocessed spent fuel from the nuclear defense program.
The agency announced in October 2018 plans for its reinterpretation of high-level radioactive waste (HLW), as defined in the Nuclear Waste Policy Act (NWPA) of 1982, with plans to classify waste by its hazard level and not its origin. By using the idea of a reinterpretation of a definition, the DOE may be able to circumvent Congressional oversight. And in its regulatory filing, the DOE, citing the NWPA and Atomic Energy Act of 1954, said it has the authority to “interpret” what materials are classified as high-level waste based on their radiological characteristics. That is not quite true, as Congress specifically defined high-level radioactive waste in the Nuclear Waste Policy Act, and any reinterpretation of that definition should trigger a Congressional response.
Wendy Davis announces bid for Congress, will challenge US Rep. Chip Roy
The former state senator is running for office for the first time since her unsuccessful campaign for Texas governor.
Former Texas state Sen. Wendy Davis is running for Congress.
Early Monday morning, Davis announced her candidacy for the Democratic nomination in Central Texas' 21st District. She is challenging U.S. Rep. Chip Roy, a freshman Republican from Austin.
She made her intentions known in a biographical video, narrated in part with archival footage from her late father, Jerry Russell.