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Oil Gains as U.S. Jobless Claims Drop, China Crude Imports Rise

Oil climbed as U.S. jobless claims fell, Japan boosted its estimate of economic growth, and China increased imports of crude, signaling improved prospects for fuel demand in the biggest energy consuming nations.

Futures reversed yesterday’s 0.6 percent decline as customs figures showed that China lifted net imports of crude in August by 10 percent from July. U.S. equities rose yesterday in New York after a bigger-than-estimated drop in jobless claims. Prices also gained after a leak prompted Enbridge Energy Partners LP shut a pipeline that can carry more than one-third of oil to the U.S. Midwest.

“The Chinese trade figures were positive and show an economy where production growth is relatively strong,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “There is positive sentiment in the market and as a result you’re seeing oil as a benefactor.”

The October contract rose as much as 78 cents, or 1.1 percent, to $75.03 a barrel in electronic trading on the New York Mercantile Exchange, and was at $75.02 at 4:24 p.m. Sydney time. Yesterday, it lost 42 cents to $74.25. Prices are 0.4 higher for the week and down 5.6 percent this year.

U.S. crude oil stockpiles fell 1.85 million barrels to 359.8 million last week, a report from the Energy Department showed. Supplies were forecast to climb by 1 million barrels, according to a Bloomberg News survey.

Initial jobless claims dropped in the U.S. by 27,000 to 451,000 last week, according to Labor Department figures, compared with the median economist estimate of 470,000 in a Bloomberg survey.

Jobless Claims

“The equity markets climbed relatively well after better-than-expected unemployment numbers coming out of the U.S. and oil has just bounced,” said Peter McGuire, Sydney-based managing director at CWA Global Markets Pty, a global commodities trader.

China, the world’s biggest energy consumer, posted a third straight trade surplus of $20.03 billion in August, the customs bureau said on its website, compared with $15.7 billion for the same month a year earlier. The median estimate in a Bloomberg News survey of 34 economists was $26.9 billion. Exports climbed 34.4 percent. Imports grew a more-than-forecast 35.2 percent.

The country’s net crude purchases rose to 20.65 million metric tons from 18.8 million tons in July, according to preliminary data released today by the Beijing-based General Administration of Customs. Net imports of oil products doubled to 490,000 tons.

Japan’s gross domestic product grew at an annualized 1.5 percent rate in the three months ended June 30, a Cabinet Office report showed, faster than the 0.4 percent reported last month. The figure matched the median of 21 estimates in a Bloomberg News survey of economists.

Crude Demand

Oil has dropped almost 6 percent this year as evidence has emerged that the global economic recovery will be uneven, damping the outlook for consumer demand.

Global crude consumption may weaken during the rest of the year because of “the severity of the economic crisis and its prolonged impact on the world economy,” the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world’s oil, said yesterday in a monthly report.

The world will need 28.8 million barrels of oil a day from its 12 members next year, OPEC said. That’s about 100,000 barrels less than forecast in last month’s report.

“The oil market will probably head sideways for the week ahead, I don’t see anything to really push it higher,” CWA’s McGuire said.

Pipeline Leak

Enbridge’s Line 6A is part of its Lakehead system, which can carry 670,000 barrels a day of oil from Canada to refineries in the U.S. Midwest, according to a company website. Crews are investigating the situation, said Glenn Herchak, a company spokesman. He declined to provide information on what the line was carrying and if it was at full rates.

Inventories of distillates, a category that includes heating oil and diesel, declined 388,000 barrels to 175 million last week, yesterday’s Energy Department report showed. Supplies were forecast to increase 700,000 barrels, according to the Bloomberg News survey.

Gasoline supplies declined 243,000 barrels to 225.2 million. Stockpiles were forecast to fall 1 million barrels, according to the median of responses from the Bloomberg News survey.

Brent crude for October settlement lost as much as 42 cents, or 0.5 percent, at $77.05 a barrel on the London-based ICE Futures Europe exchange. Yesterday, it slipped 70 cents, or 0.9 percent, to end the session at $77.47. Crude oil may fall next week on concern that global economic growth will slow, reducing fuel demand and bolstering supplies, a Bloomberg News survey showed.

Twelve of 22 analysts, or 55 percent, forecast crude oil will decline through Sept. 17. Six respondents, or 27 percent, predicted that futures will be little changed, and four projected prices will rise. Last week, 41 percent said crude would decrease.

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