The dim forecast on the world economy has added to the weight of a trade discord between Beijing and Washington in the past few weeks, but robust figures coming from the Chinese mainland have pushed prices of oil to soar late Wednesday.
Brent crude was up over 4 percent to rally back above $60 per barrel, monitoring earnings in equities in a quarter when oil prices have been jolted by worries for the global economy. WTI crude was trading over 4.20 percent for an increase of $2.28 on the day, at $56.20/barrel.
Analysts and traders said the market was stabilizing after positive economic figures from Chinese services sector had ease concerns of a global slump, though market numbers from Wall Street and most of Europe are not as rosy, especially in the manufacturing area.
China's services market indicated that for the month of August, it climbed to its fastest rate in one quarter, which sparked a series of hiring opportunities - the largest increase in the sector in more than 12 months.
UBS commodities analyst Giovanni Staunovo pointed out that oil price had been backed by rallies in the S&P 500, which was up 0.9 percent, with markets having become tightly-knitted as recession worries have discouraged investors. "Prices of oil are following a market sentiment," Staunovo said.
China, a huge consumer of crude and oil, imported more than 10 million barrels per day in April, setting a new record for the state. It's crude imports for the first half alone showed a 9 percent increase year-on-year, or 800,000 bpd. The growth in this part of the region represents nearly all of the globe's demand growth for 2019, thus it makes sense that all eyes are on the country's economic output.
China's August oil imports by its major producers PetroChina and Sinopec rose 2.04 percent compared to its July imports, which is bigger than its gains in July of 1.24 percent. Analysts predict that these two oil majors will produce even more oil this month, as rigs and refinery maintenance slows.
The Oil Petroleum Exporting Countries and its market partners are also projected to keep output curbs in place, which have also moderately tightened supplies.
Meanwhile, market observers said a new series of sanctions by the United States on Iran's oil production also backed the rally, with President Donald Trump says he will ramp up his "maximum pressure approach" on exports from this country.
