By mid-afternoon in New York, crude oil futures had risen a massive 2.26% to $105.78 a barrel, lifted by data from China, the second largest consumer of oil in the world, showing a bigger-than-expected rise in factory output in July. It is the first time in over a week that the price of crude has advance on the day.
The Chinese National Bureau of Statistics released figures today showing that factory output (also known as industrial production) increased by 9.7% in July, compared to the level a year ago; this was nearly a full percentage higher than had been expected and compares favourably to the annualised increase of 8.9% seen in June.
The report comes alongside a list of other positive data out of China this week, including strong retail sales and a big rise in exports for July. China accounts for well over 10% of global crude oil demand, so signs that its economy may once again be accelerating are very supportive for oil prices.
China is not the only country with rising exports providing evidence of recovery. The Office for National Statistics today reported that UK exports expanded to a record in the second quarter of the year, while a report yesterday showed that German exports rose strongly in June. The economic outlook for both China and Europe are looking brighter and that should provide some tailwind to crude.