Crude pares gains, heads for weekly loss

The price of US light crude oil has advanced today, after data showed growth in the Chinese economy picked up pace in the last quarter.

US light crude oil futures were trading up 0.4% at $101.00 a barrel by mid-afternoon in New York, having been close to $102 earlier in the day.

The commodity is still down on the week though; its price slid by 1.6% yesterday, hitting its lowest point since the beginning of July, after data from the American Petroleum Institute suggested US inventories swelled again last week.

Official government data was delayed because of the shutdown, and the Energy Information Administration (EIA) will now release data for the week ended 11 October on Monday 21 October.

Today’s bounce was spurred by news that China’s gross domestic product grew 7.8% year-on-year for the quarter running from July through to September.

China is the world’s biggest importer of oil and the second largest consumer of oil in total, accounting for around 11% of global consumption , behind the 21% consumed by the US. The slackening pace of growth in previous quarters had led to concerns about oil demand, therefore, and a resumption of acceleration in GDP growth has proven to be supportive for the price of oil.

The fact that the gains have eroded as the trading day has progressed suggests that there are some question marks over whether China can sustain this pace of growth though.

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