Oil Rises After Report Shows Record Runs at Chinese Refineries

By Rachel Graham

Dec. 11 (Bloomberg) -- Oil rose for the first time in eight days after China’s government said the country’s refineries processed a record amount of crude last month.

Refining volume in China, the world’s second-largest energy consumer, climbed 21 percent from a year earlier to 33.4 million metric tons, or 8.1 million barrels a day, according to government statistics. China’s industrial production grew more than estimated in November.

“This is the fastest growth in Chinese oil demand since 2004,” Amrita Sen, a London-based oil analyst at Barclays Capital, said by phone. “China has really surprised to the upside this year.”

Crude oil for January delivery rose as much as 55 cents, or 0.8 percent, to $71.09 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.05 a barrel at 9:32 a.m. London time.

Oil prices have fallen 8 percent since the beginning of this month and fell 3 percent on Dec. 9, when a U.S. government report showed U.S. gasoline inventories rose to the highest level since April. Futures are up 59 percent this year.

China imported 17.1 million metric tons of crude oil in November, 28 percent more than a year earlier, government data showed. Imports of crude oil in the first 11 months gained 11 percent to 182.5 million tons, according to preliminary data from the Beijing-based General Administration of Customs today.

The International Energy Agency cut its forecast for oil supplies from outside the Organization of Petroleum Exporting Countries next year because of delays to North American projects.

Global Demand

Non-OPEC producers, accounting for about 60 percent of the global total, will provide 51.6 million barrels a day in 2010, or 265,000 barrels a day less than previously anticipated, the adviser to 28 nations said in its monthly report today.

The IEA raised its forecast for 2010 global oil demand for a fifth month, and boosted its medium-term consumption outlook through to 2014, on expectations of economic recovery. Worldwide demand is likely to average 86.3 million barrels a day in 2010, 130,000 a day more than previously estimated, the adviser said.

Output from OPEC, due to meet in Angola on Dec. 22 for a review of quotas, climbed to its highest in a year during November, averaging 29.1 million barrels a day, the IEA said. A lull in militant attacks on oil facilities in Nigeria was behind the increase.

The compliance rate among the 11 OPEC members subject to production quotas slipped to 58 percent last month from 60 percent in October, with Iran and Angola violating their limits most, according to the agency.

Brent crude oil for January settlement rose as much as 74 cents, or 1 percent, to $72.60 on the London-based ICE Futures Europe exchange. It was at $72.44 a barrel at 9:33 a.m. local time.

To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net