Oil rises on China energy demand concerns

A pumpjack brings oil to the surface in the Monterey Shale, California, U.S. April 29, 2013. (Reuters photo)

SULAIMANI (ESTA) — Oil prices rose on Tuesday as falling temperatures in China revived concerns about its ability to meet heating demand needs amid power and coal shortages.

Brent cruse rose 39 cents to $84.72 a barrel by 0731 GMT after falling 0.6% on Monday. The contract is still up nearly 7% this month.

U.S. West Texas Intermediate (WTI) futures gained 53cents to $82.97 per barrel, having risen 0.2% in the previous session and nearly 10% this month.

Brent dropped on Monday after China released growth figures that disappointed the market but with temperatures falling as the northern hemisphere winter approaches and heating demand increasing, prices of oil, coal and natural gas are likely to remain elevated, Reuters cited traders and analysts as saying.

“Tightness in energy markets meant supply side issues remain prevalent and commodities prices remain supported,” an energy derivatives trader based in Singapore told Reuters.

The power crunch that is sending prices higher is also hurting Chinese economic growth, which fell to the lowest in a year, Reuters reported, citing official data.

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