Oil rebounds 1 percent

Oil rebounds 1 percentOil prices rebounded by about $1 today as investors focused on strong demand growth in Asia after a sell-off the previous day triggered by a surprise increase in U.S. gasoline stockpiles.

Brent crude for June gained $1.02 to $113.59 a barrel by 0504 GMT to partly reverse a 4 percent drop on Wednesday when official data showed the first increase in U.S. gasoline inventories in 12 weeks.

From news.yahoo.com:

“In the United States they are more concerned about the unexpected rise in gasoline inventories and the sputtering economic recovery,” said Gordon Kwan, head of energy research at Mirae Assets Securities in Hong Kong.

“But over in Asia we have a more bullish view. Even if we see weakening in Chinese industrial output, it is still very strong and we don’t believe in a hard landing.

Inflation has peaked, so we believe tightening policies will be done by the end of the third quarter. Oil demand will remain elevated in the run-up to the winter.”

Implied oil demand in China, the world’s second-largest crude consumer, reached its third-highest level on record last month, but year-on-year growth slipped to 8.8 percent after six consecutive months of double-digit gains.

At the current pace, China has surpassed a growth rate of 5 percent to 7 percent in oil consumption suggested in a Reuters poll earlier this year.

The Brent crude gain triggers a slump across fuel markets that shaved more than $5 from front-month Brent. U.S. crude advanced $1.06 to $99.26.

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