WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange advanced in early morning trade Monday following better-than-expected industrial data out of China showing a solid recovery in its industrial sector and an encouraging demand outlook from Saudi Aramco for the second half of the year.
Near 7:30 a.m. ET, September West Texas Intermediate crude oil futures gained 54 cents to trade at $41.80 per barrel (bbl) and the international Brent crude contract clawed back, trading up 40 cents to $44.80 bbl. NYMEX ULSD September futures advanced 1.12 cents to $1.2311 gallon and front-month RBOB futures moved up 1.39 cents to $1.2215 gallon.
Overnight data out of China showed producer price index, which measures costs for goods at the factory gate, continued to increase in July, improving 0.6% from a month prior to 2.4%, according to the National Bureau of Statistics. Month-on-month gains are mostly attributed to improved global demand for Chinese manufactured goods and a pick-up in government-led orders, said NBS, adding rising international oil prices also played a role. China saw its foreign trade jump 6.5% year on year in July, with exports and imports up 10.4% and 1.6% respectively, data showed.
China's fuel consumption was also cited as a major driver of global demand recovery by Saudi Aramco's Chief Executive Amin Nasser during the press conference following release of the company's second-quarter profits. "Look at China, their gasoline and diesel demand is almost at pre-COVID-19 levels. We are seeing that Asia is picking up and other markets (too)," he told reporters on Sunday. Saudi Aramco's profits plunged a deeper-than-expected 73% during the second quarter as global demand for refined products collapsed on the back of the coronavirus pandemic.
In the United States, however, gasoline consumption has flattened out in July -- also the peak month for driving season, which is likely to pressure oil prices in coming weeks. Four-week average gasoline demand for the four-weeks ended July 31 was 8.6 million barrels per day (bpd), down roughly 9.1% versus last year's levels, said official data from U.S. Energy Informational Administration.
The U.S. labor market also flashes signs of slowing down after July's non-payrolls showed a mere 1.783 million jobs were added following 4.8 million job gains in June and 2.699 million in May.
Liubov Georges can be reached at email@example.com
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