Oil prices rallied today after China’s trade surplus was reported to have declined from US$27.2 billion in October to US$22.9 billion in November, which, however, still topped expectations.
The country’s central bank said today it will raise the reserve requirements for Chinese banks by another 50 basis points, the sixth increase this year and the latest attempt to curb rising inflation.
China is the world’s second largest energy consumer behind the US.
Investors got mixed signals about the strength of energy demand in the US from this week’s inventories reports.
The US Department of Energy said that crude oil stockpiles shed 3.8 million barrels, however, gasoline inventories increased by 3.8 million barrels.
Yesterday’s employment data was positive.
The US Labor Department said that jobless claims continued declining last week with the number of applications for unemployment benefits falling 17,000 to 421,000.
US light, sweet crude for January delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), reached US$88.86/barrel, while February crude climbed to US$89.37/barrel.
On the ICE Exchange, January Brent Crude rose to US$91.47/barrel. Brent for February delivery advanced to US$91.59/barrel.
BP (LON:BP) declined 1.2%, while fellow supermajor Shell (LON:RDSB) posted a small gain.
Tullow Oil (LON:TLW) climbed 1%, while other FTSE 100 constituents BG Group (LON:BG) and Cairn Energy (LON:CNE) lost nearly 2%.
Amec (LON:AMEC) stood just above the opening level. Another oil and gas engineering firm Petrofac (LON:PFC) shed 1%.
Melrose Resources (LON:MRS) led the midcaps, climbing 2.4%. Salamander Energy (LON:SMDR) and Soco International (LON:SIA) added 1.5% and 1% respectively.
JKX Oil & Gas (LON:JKX) posted a small gain.
Heritage Oil (LON:HOIL) moved in the opposite direction, shedding 1.6%. Premier Oil (LON:PMO) declined marginally.
Service company Wood Group (LON:WG) added 1.2%.
Ukraine operating gas producer Regal Petroleum (LON:RPT) and energy sector focused investor Xtract Energy (LON:XTR) were among the top performers in the sector, advancing 19% and 11.5% respectively.