Brent oil trading near $91, gains on Chinese economy

14 December 2010 14 December 2010

BonTrade

Brent oil prices open Tuesday’s trading session near the $91 mark as commodities gain on news that the Chinese government will not be raising interest rates, yet.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2011 delivery was trading at $91.07 a barrel, 06.45 GMT this morning on the ICE Futures Exchange.

Chinese Oil Demand on the Rise

China’s crude oil demand in November rose 13.7 percent from 2009 to a record of nearly 9.3 million barrels per day.

On Friday, China’s central bank raised bank reserve ratio, which was seen as a more moderate austerity measure compared to a rise in interest rates.

However, the concerns remain that China will raise its interest rate, which would then cause an inhibition on the growth of its domestic economy and consumption, thereby affecting the demand for crude oil.

“If nothing is going to be slowing their economy down in the short term, the market views that as a positive. In the long term, it raises massive question marks about how they are going to slow their economy. In the short term, the market likes it and commodity markets like it too.” said David Taylor, an analyst at CMC Markets in Sydney.