World oil prices rally on Chinese exports, IEA outlook

NEW YORK—Oil prices rose for the third consecutive day in New York on Thursday, boosted by strong Chinese exports data and an upbeat energy demand outlook from the International Energy Agency.

New York's main futures contract, light sweet crude for delivery in July, closed at $75.48 a barrel, up $1.10 from Wednesday.

In London, Brent North Sea crude for July added $1.02 to settle at $75.29.

"It's been driven by the news out of China showing significant increase in Chinese exports, consequently people feel it will lead to an increase of demand for oil," said Andy Lipow of Lipow Oil Associates.

China said Thursday its trade surplus soared in May on strong foreign demand that drove exports up a whopping 48.5 percent from a year ago.

The trade figures helped ease concerns that the eurozone debt crisis would weigh on the world's third-largest economy and second-largest energy consumer, seen as the prime engine of global oil demand.

"It is certain that the strong Chinese figures, the weakening US dollar and (US Federal Reserve chairman Ben) Bernanke's comments yesterday regarding a bright tone for the US economy will continue to dominate the markets," said Sucden analyst Myrto Sokou.

"These (factors) are expected to boost investors' confidence and drive crude oil prices higher."

The oil demand outlook gained a boost from the International Energy Agency's latest monthly Oil Market Reprot.

The IEA hiked its estimate of global demand by 60,000 barrels per day to 86.4 million barrels per day this year, saying initial data on economic activity in advanced countries was stronger than expected.

"It would be a record oil demand for the world. Their overall demand picture has pretty much stabilized over the last few months, showing improvement... construed as bullish," said Lipow.

On the currency market, the seemingly brighter macroeconomic climate encouraged investors to venture out of the relative safe haven of the dollar and into riskier currencies, such as the euro.

The single European currency, which has been hammered in recent weeks because of fears for the financial health of the debt-encumbered eurozone, rose to $1.2108 from $1.1975 on Wednesday.

A weaker dollar makes dollar-priced oil cheaper, helping to boost demand.

Source: Inquirer