Oil price increases 1% due to supply constraints, PRC incentives

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LONDON, Jul 21 (Reuters) – Oil prices continued their gains on Friday, helped by signs of supply constraints and economic stimulus in slowly recovering China.

Brent crude oil futures rose 1.24% to $80.63 a barrel at 1:33 p.m. Moscow time, WTI rose 1.3% to $76.63 a barrel.

The shortage of supply that appeared in the second half of the year is now supported by real numbers, Commerzbank analysts said, citing the latest data that in June oil imports from Russia to

China

and India reached record levels.

However, interest in buying India is likely to wane with discount cuts and billing issues.

“In this way, the demand of Chinese and Indian buyers may shift towards other suppliers, leading to higher oil prices,” the analysts said.

U.S. crude inventories fell by 708,000 barrels in the week ended July 14 to 457.42 million barrels, the Energy Information Administration (EIA) said on Wednesday.

Meanwhile, sentiment in commodity markets improved after Beijing announced a series of measures on Friday to boost sales of cars and electronics in a bid to boost a slowing economy.

“The report is still poor in detail, but the idea that the Chinese will buy more cars gives hope to the oil bulls,” said PVM’s John Evans.

Original English post available at: (Natalie Grover featuring Arati Somasekara in Houston and Andrew Haley in Beijing)