Oil is bouncing thanks to China

A member of Team Hype jumps to shoot during a performance at the NBA Global Games basketball match between Sacramento Kings and Brooklyn Nets in Beijing October 15, 2014.REUTERS/Kim Kyung-HoonBounce!

Oil is rebounding after data showed a big increase in oil consumption in China last year.

Chinese preliminary oil demand for 2015 was at a record 10.32 million barrels per day, up 2.5% on 2014’s figure, according to Reuters.

That’s sent the price of Brent oil bouncing 2.52% to $29.27 (£20.47) and US crude climbing 0.84% to $30.65 (£21.43) at 8.55 a.m. GMT (3.55 a.m. ET).

The rally comes after a price slump in early morning trade on Tuesday, after Iran’s oil ministry ordered an increase in daily production of 500,000 barrels. The Middle Eastern nation is hoping to take advantage of an expected imminent lifting of sanctions.

Mic Mill, head of client services at spread betting company CapitalIndex, says in an emailed statement this morning:

Oil enjoyed some much-needed buying interest as strong Chinese fuel consumption helped Brent to trade up above $29 a barrel again, but any upside for Brent is tempered by the knowledge that Iranian oil will be exported to Europe but not to the US leading WTI to trade at a premium.

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