Crude Oil Trades Near $45 as China to Boost Commodity Imports

March 5 -- Crude oil traded near $45 a barrel, after climbing in the past two days, as China plans to increase imports of commodities.

The world’s second-largest oil consumer will boost stockpiles of economically strategic materials, Premier Wen Jiabao said in Beijing today. Prices climbed 9 percent yesterday after an official said the country may add to their stimulus plan. A U.S. government report yesterday showed an unexpected drop in crude inventories.

“If these efforts to stockpile crude oil and oil products become a reality then it raises China’s apparent demand,” said Victor Shum, a senior principal at Purvin & Gertz Inc. in Singapore. “In terms of a global impact, it will certainly tighten up the supply and demand situation.”

Crude oil for April delivery was at $44.92 a barrel, down 46 cents, in electronic trading on the New York Mercantile Exchange at 1:29 p.m. Singapore time. Yesterday, futures rose $3.73 to $45.38. Prices are down 69 percent from the record high of $147.27 a barrel reached on July 11.

China will “significantly increase” investments in 2009 to counter a slowdown in the world’s third-biggest economy, Wen said in the work report, presented to the National People’s Congress. He didn’t announce a bigger stimulus package.

Commodities yesterday had their biggest increase since Dec. 31. The Reuters/Jefferies CRB Index of 19 raw materials rose 7.78, or 3.8 percent, to 211.45.

(Bloomberg)