SINGAPORE: Brent futures rose towards $109 a barrel on Monday as demand growth worries ebbed after data from China showed the world's second-biggest economy expanded in line with expectations.
China's GDP grew 7.5 percent in April-June, and while that marked a slow down in nine of the last 10 quarters, the showing was a relief for many investors who were primed for a downside surprise. Industrial output was slightly less than forecast, but crude runs in the country's refineries and implied oil demand both rose in June, supporting oil markets further.
Brent crude gained 11 cents to $108.92 a barrel by 0336 GMT, swinging between a high of $109.02 and a low of $108.61. US oil gained 8 cents to $106.03, recovering from a low of $105.50 touched earlier in the day.
"Overall, the latest numbers from China were in line with expectations, there were no huge surprises and it is a continuation of the soft theme," said Ric Spooner, chief market analyst at CMC Markets. "But industrial output numbers were weak, and there is growth risk to the downside, going forward."
China's implied oil demand rose by nearly 10 percent in June over a weak base a year earlier to 9.94 million barrels per day (bpd), Reuters calculations based on preliminary government data showed. Crude runs rose 10.8 percent to 9.636 million bpd, the highest daily output since February, as refineries boosted production after maintenance.
The latest numbers out of China helped oil futures extend gains. Brent settled $1.08 higher on Friday, while US crude ended up $1.04, led by the biggest surge in gasoline futures this year as a string of refinery outages stoked concerns about fuel supplies in the heart of the US summer driving season.
US crude has outperformed Brent for the past two weeks, narrowing the European benchmark's premium to US crude to a 2-1/2 year-low of $1.32 at one point on Thursday. It was around $3 on Monday.
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