Brent oil trading at $122, China growth bullish for prices

Brent oil futures open today’s trading session at $122 a barrel after the latest growth data out of China confirmed that the country’s industrial output remains strong, which will be bullish for oil prices.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2011 delivery was trading at $122.25 a barrel, 07.30 GMT this morning on the ICE Futures Exchange. The May 2011 Brent oil contract expired yesterday.

China Growth and Oil Demand

China’s economy grew than 9.7 percent in the first quarter of 2011, analysts expected a 9.4 percent rise, while China’s inflation accelerated in March to the fastest pace since 2008.

“The Chinese data is both bullish and bearish for commodities. It’s a difficult situation for the Chinese government. They would like to sustain the economic growth for as long as possible, but they have to control consumer prices.” said Tetsu Emori, a commodity fund manager with Astmax, Tokyo.

China’s implied oil demand increased 11 percent from a year earlier to 9.16 million barrels per day in March, however the daily rate was nearly 4 percent lower than the 9.53 million barrels per day posted in February, the second highest figure on record.

$130 Brent Oil Price Next Week?

“We still expect oil prices to march higher because there is a strong correlation historically between China’s industrial output growth and oil prices. We expect Brent prices to test $130 a barrel next week, also because of escalating tensions in Libya and because European refineries are coming back from maintenance.” said Gordon Kwan, head of regional energy research at Mirae Asset Securities, Hong Kong.

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Brent oil trading at $122, China growth bullish for prices