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07:51 AM Eastern Standard Time, 03/10/2010 (MidnightTrader) — Oil is on the rise in early morning trade Wednesday, lifted by signs of strong demand for imports in China, coupled with OPEC raising its oil demand forecast.
China reported its February trade surplus shrinking to its lowest level in a year on the back of strong demand for imports, and many analysts anticipate the country to overtake the United States as the single biggest destination for global goods in the not-too-distant future.
At 0745 ET, Brent crude is up 0.5% at $80.28, while light sweet crude is up 0.4% at $81.79, and natural gas is down 0.3% at $4.50 a million British thermal units.
With China’s imports growing nearly 45% from a year ago to post a trade surplus of $7.61 billion, expectations are high that the country will continue to fuel demand in the still-shaky global economy.
Meanwhile, the Organization of Petroleum Exporting Countries said in its latest report that member states will need to pump more crude than earlier expected, as it cut back its outlook for natural gas liquids production. OPEC expects it will need to produce 28.94 million barrels a day to meet global demand this year, about 190,000 barrels more than it forecast in February. OPEC produces about 40% of the world’s total oil output. The members of the Vienna-based organization will be meeting March 17 to decide on production quotas.
Turning to Brazil, Petroleo Brasileiro, better known as Petrobas (PETR4), reported that together with Repsol (REP) and BG Group (BG), it has found more oil in the Santos Basin. State-owned Petrobas said, however, that it has yet to determine whether the find can be developed commercially. Petrobas has a 45% stake in the project, while Britain’s BP has a 30% share, and Repsol of Spain owns 25%.
Meanwhile, Tullow Oil (TLW), together with China National Offshore Oil (CEO) and Total (TOT) will be allowed to ramp up production in Uganda. Tullow expects output in Uganda to exceed 200,000 barrels a day from 2014.
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