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Oil on boil: Brent crude hits high of 2019; key factors behind surge

FE Online

Hitting a 2019 high, brent crude on Wednesday reached above $72 level on account of robust China growth numbers and decline in US crude stocks, even as global supply remained tight.International benchmark Brent crude futures were up 20 cents, or 0.28 percent, at $71.92 by 1320 GMT, having hit an intraday peak of $72.27, Reuters reported.

Similarly, US West Texas Intermediate (WTI) crude futures were at $64.39 per barrel, up 34 cents or 0.53 percent and just shy of a 2019 high of $64.79 hit last week.

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“The demand side of the equation got a substantial fillip via today’s China data suggesting prices will continue to move higher on improving global growth and risk sentiment,” Stephen Innes, head of trading at SPI Asset Management told Reuters.

China said Wednesday its economy grew 6.4 percent in the first quarter of 2019, beating analysts’ expectations. A Reuters poll predicted the country’s gross domestic product would grow 6.3 percent year-on-year in the first three months of the year. China grew by 6.4 percent year-on-year in the fourth quarter of last year, and 6.8 percent in the first quarter of 2018.

Meanwhile, Goldman Sachs has already raised its crude oil price forecast for this year, in what could worry for the Indian government and consumers alike, who may have to face a higher inflation and rising fuel prices at home. Brent crude oil price has been on continuous rally for last many says owing to tensions in Libya one of the largest oil producers in the world, decline in supply by OPEC countries, and US sanctions against Iran and Venezuela.