Brent Crude Rises as China’s Growth Exceeds Estimates

Brent crude rose for the third time in four sessions as China’s economic growth beat analysts’ estimates, increasing demand for oil. West Texas Intermediate also climbed.

Futures climbed as much as 1.1 percent in London. China’s gross domestic product rose 7.3 percent in the July-September period from a year earlier, the statistics bureau said today in Beijing. While that exceeded the 7.2 percent median estimate in a Bloomberg News survey of analysts, it was also the slowest expansion since the first quarter of 2009. The country’s oil demand increased by 7.1 percent in September, more than double the growth rate in August, according to data compiled by Bloomberg.

Oil is paring its collapse into a bear market as banks including BNP Paribas SA and Bank of America Corp. predict the rout may be over. They’re in part counting on the Organization of Petroleum Exporting Countries to reduce supply as the U.S. pumps the most oil in almost three decades andRussia’s output rises to a near a post-Soviet record.

“China at least didn’t surprise negatively, which was important after prices were pushed down last week on poor macro figures and the market was fearing more this week,” Thina Saltvedt, an oil analyst at Oslo-based Nordea Markets, who forecasts Brent climbing to $90 a barrel in the next two weeks, said by phone. “As long as there are no setbacks on the financial side, prices will continue to move higher.”

Brent for December settlement was 47 cents higher at $85.87 a barrel at 11:48 a.m. on the London-based ICE Futures Europe exchange. It earlier climbed as high as $86.35. The volume of all futures traded was 7 percent above the 100-day average for the time of day. Front-month prices have decreased 22 percent this year.

China Growth

WTI for December delivery, the most-actively traded, was at $82.34 a barrel in electronic trading on the New York Mercantile Exchange, up 43 cents. The November contract, which expires today, gained 48 cents to $83.19. The European benchmark crude traded at a premium of $3.52 to WTI on ICE for December, compared with a close of $3.49 yesterday.

China’s apparent oil demand, calculated as refinery output plus net imports of refined petroleum, rose to 10.35 million barrels a day in September, according to data compiled by Bloomberg. Chinese refiners processed 42 million metric tons of crude in September, a 9.1 percent gain from a year earlier, according to the National Bureau of Statistics in Beijing. The country’s purchasing managers’ index will be published Oct. 23.

U.S. Stockpiles

U.S. gasoline inventories probably declined to 204.2 million barrels in the week ended Oct. 17, according to the median projection in the Bloomberg survey of eight analysts. Distillate supplies, which include heating oil and diesel, are projected to have slid by 1.5 million.

Crude stockpiles are forecast to have increased by 3 million barrels to 373.6 million, the survey shows. Production climbed to 8.95 million a day previously, the most since June 1985, said the EIA, the Energy Department’s statistical arm.

The American Petroleum Institute in Washington will publish separate supply data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines, while the government requires that reports be filed with the EIA.

Total SA’s Chief Executive Officer, Christophe de Margerie, was killed when his airplane struck a snowplow on a Moscow runway, ending a career in which he oversaw the biggest expansion of oil reserves at the French energy giant in at least 15 years. The crash also killed three crew members, Total said in a statement. The driver of the snowplow was drunk, Russia’s Investigative Committee said in a statement on its website.

To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.netJames Herron, Rachel Graham

Tokyo stocks tumble as weak global data spook markets; yen gains | Mitch Cator

(Reuters) - Japanese stocks were knocked hard on Thursday as weak global manufacturing activity and an Ebola health scare in the United States spooked world markets, sending investors scurrying to the safety of U.S. bonds, the yen and gold.

The gloom is seen keeping Europe on the defensive, with spreadbetters forecasting Britain's FTSE and Germany's DAX each to drop as much as 0.2 percent, and France's CAX to start 0.1 percent lower.

Investors warmed to the yen after a slew of surveys showed German factory activity shrank for the first time in 15 months, China's manufacturing sector barely grew, while the United States slowed more than expected.

 

 

Japanese equities led the selloff in Asia, with the backdrop of concerns over global growth and a sputtering domestic economy pushing Tokyo's Nikkei down a sharp 2.1 percent to three-week lows.

MSCI's broadest index of Asia-Pacific shares outside Japandropped 0.1 percent, with the downturn potentially limited by market closures in both China and Hong Kong for public holidays.

"Recent days has seen a barrage of nerve inducing events converge to cast a shadow over the investment outlook," Niall King, sales trader at CMC Markets in Sydney, wrote in a report to clients.

"Confirmation of a case of Ebola in the US has joined a growing list of bad news stories with geo-political tensions in Ukraine and Hong Kong, and growth concerns around China and Europe sapping risk appetite," he said.

The continued civil unrest in Hong Kong has dented investor confidence, although the city's streets were calm early on Thursday.

On Wednesday, U.S. stocks dropped more than 1 percent on the Ebola news and the unexpected slowdown in U.S. manufacturing growth. The renewed evidence of an uneven recovery in the global economy heightened investor caution ahead of the all-important U.S. non-farm payrolls report on Friday.

The risk-averse mood benefited the yen and sent U.S. Treasury yields down. The dollar slipped back below 110 yen - a threshold breached for the first time since 2008 this week - and was down 0.2 percent at 108.71 yen.

The euro rose 0.3 percent to $1.2658, crawling further away from a two-year low of $1.2571 hit earlier in the week.

Traders were also focused on the European Central Bank meeting later in the session with the divergence of U.S. monetary policy with those of Europe and Japan now an established market theme.

The U.S. Federal Reserve is probing ways to normalize monetary policy, while the ECB and Bank of Japan are seen stuck with their very easy policies for the foreseeable future.

"The market interest is not in the rates decision, where the ECB insists the refinancing rate will not fall further from 0.05 percent, but in President Draghi's press conference," Sean Callow, senior currency strategist at Westpac in Sydney, wrote in a note to clients.

The markets will focus on the expected size of the ECB's plan to buy asset-backed securities and euro-denominated covered bonds after Draghi promised to provide "detailed modalities" of the plans at the previous meeting in September, Callow said.

In commodities, Brent crude oil fell toward $94 a barrel, continuing a three-month losing stretch as weak economic signals from China and Europe and ample global supply continued to weigh.

Brent crude dipped 10 cents to $94.06 a barrel.

Gold added to small gains, buoyed by risk-averse sentiment as weak global manufacturing data in the United States unnerved equity markets. [GOL/]

Spot gold rose 0.5 percent to $1,219.27 an ounce.

(Editing by Eric Meijer & Shri Navaratnam)