Oil moves higher after Chinese inflation data, OPEC comments
Oil prices rebounded after today's Chinese economic data came in stronger than expected. The government said that industrial production rose 13.3 percent from a year ago in May. While lower than the 13.4 percent increase in April, it was still ahead of expectations.
Meanwhile, consumer price inflation reached the highest level in 34 months at 5.5 percent.
China is the world's second largest energy consumer behind only the US.
Secretary General of the Organization of Petroleum Exporting Countries (OPEC) Abdullah al-Badri sounded an alarm that rising oil prices will likely leads to supply shortages in the market in the second half of the year.
This would drive the prices even further up and deliver a blow to the ongoing economic recovery, al-Badri warned.
OPEC failed to agree on an output hike at last week's meeting in Vienna even though the cartel's most influential member Saudi Arabia was in favour of increasing production to meet growing market demand.
Oil futures rose sharply on the back of the meeting, but retreated below US$100/barrel after it was reported that Saudi Arabia decided to raise output anyway.
US light, sweet crude for July delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), climbed to US$97.62/barrel, while August crude reached US$98.13/barrel.
July Brent crude last traded at US$120.14/barrel on the ICE Exchange.
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