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Oil price rebounds on Chinese demand outlook

Oil price rebounds on Chinese demand outlook
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Oil prices rose on Wednesday from Chinese plans to increase its energy imports this year.

Beijing also said it will keep policies to ensure stable export growth, which it expects to improve in the second half of the year.

However Brent – and its equivalent US benchmark – remained well below last week’s near four-year highs.

That is because Iran’s offer of talks on its nuclear programme has eased concerns about supply disruption.

US President Barack Obama said an announcement of six-power talks with Iran offered a diplomatic chance to defuse a crisis over its nuclear program and quieted the “drums of war.”

“It was getting quite worrying but tensions have eased and it’s looking more like both sides could come out of this without losing face,” said David Morrison, market analyst at GFT.

China’s plans on energy imports reinforce a view that Asian demand will continue to support oil prices, even as demand from developed economies is seen as sluggish.

“China’s comments are a timely reminder that the Chinese and Asian economies are still growing strongly,” said Ric Spooner, chief market analyst at CMC Markets. “Even though China’s target growth rates are down for this year, it’s still growing and that means more energy needs overall.”