Oil prices rise as US imports jump, China buys crude

Oil prices rose Wednesday as the market reacted favorably to signs of an increase in future demand in China and a further loosening of the recession's grip in the US.

That trumped data showing a continued slump in the nation's appetite for oil. Benchmark crude for September delivery climbed 71 cents to settle at $70.16 a barrel on the New York Mercantile Exchange. In London, Brent prices added 43 cents to settle at $72.89 a barrel on the ICE Futures exchange.

Prices jumped in morning trading after the government said the U.S. trade deficit increased slightly in June. The Commerce Department reported that imports rose for the first time in 11 months.

Given the economy in the U.S. and Europe, energy prices might have fallen further if not for China. The IEA said Chinese energy consumption would push the overall global crude demand higher despite continued weakness in Europe and North America.

How China does during the global economic downturn has effected energy prices for the rest of the globe. The country imported a record 4.6 million barrels of fuel a day last month.

It is that purchasing power that helped change the outlook from the IEA, which added 70,000 barrels a day to its 2010 forecast of global oil demand. The new prediction of 85.3 million barrels a day is a 1.6 percent increase over this year. The IEA also boosted its 2009 forecast by 190,000 barrels a day to 83.9 million barrels a day, but noted this is still 2.7 percent lower than 2008.