Oil rises but remains rangebound as COVID-19 cases soar - Reuters News

By Bozorgmehr Sharafedin

LONDON, April 12 (Reuters) - Oil prices rose on Monday on optimism over a rebound in the U.S. economy as coronavirus vaccinations accelerated and on tensions in the Middle East, though rising COVID-19 cases elsewhere kept a lid on prices.

Brent LCOc1 was up $1.02, or 1.6%, at $63.97 a barrel by 1330 GMT. West Texas Intermediate (WTI) U.S. crude CLc1 rose $1.07, or 1.8%, to $60.39.

"Prices are finding support from external factors such as the weaker U.S. dollar and higher risk tolerance among investors, plus OPEC's continued good production discipline," said Commerzbank analyst Eugen Weinberg.

However, crude prices have remained rangebound in the past three weeks, with Brent between $60 and $65 a barrel and WTI at $57 to $62.

"Oil prices are entering a consolidation phase after swinging wildly last month," said oil broker PVM's Stephen Brennock.

"While there are still plenty of reasons to be bullish, market players have become more cautious as infections have surged in Europe, India and some emerging markets, while vaccine rollouts have proved slower than anticipated."

India now accounts for one in every six daily infections worldwide, with cases also rising in other parts of Asia. (Full Story)

Asian oil demand remained weak and some buyers have asked for lower volumes in May, partly because of refinery maintenance and higher prices. (Full Story)

The United States has fully vaccinated more than 70 million people but U.S. gasoline demand has not picked up as much as expected.

The U.S. economy is at an "inflection point" amid expectations that growth and hiring will accelerate in the months ahead, but it faces the risk of reopening too quickly and sparking a resurgence in coronavirus cases, Federal Reserve Chair Jerome Powell said in an interview broadcast on Sunday.

Prices also found some support after Yemen's Iran-aligned Houthi movement said it had fired 17 drones and two ballistic missiles at Saudi targets, including towards Saudi Aramco 2222.SE refineries in Jubail and Jeddah. (Full Story)

There was no immediate Saudi confirmation. Saudi Aramco, the state oil firm, said when contacted by Reuters that it would respond at the earliest opportunity.

China March new bank loans rise but broad credit growth eases - Reuters News

• March new loans 2.73 trln yuan vs forecast 2.45 trln yuan
• Q1 new loans at record high - Reuters calculations
• March M2 money supply +9.4% y/y, vs forecast of +9.6%
• Outstanding TSF +12.3% Y/Y, vs 13.3% in Feb
• March TSF 3.34 trln yuan, vs forecast 3.70 trln yuan

BEIJING, April 12 (Reuters) - New bank loans in China rose more expected in March from the previous month due to strong corporate and household demand, as the central bank walks a tightrope between supporting the rapidly recovering economy and containing debt risks.

Chinese banks extended 2.73 trillion yuan ($416.62 billion)in new yuan loans in March, up from 1.36 trillion yuan in February and exceeding analyst expectations of 2.45 trillion yuan, according to data released by the People's Bank of China (PBOC) on Monday. 

That pushed bank lending in the first quarter to a record high of 7.67 trillion yuan, according to Reuters' calculations based on central bank data. It beat the previous peak of 7.1 trillion yuan in the first quarter of 2020, when policymakers began rolling out unprecedented measures to deal with the shock from the coronavirus crisis.

The surge in loans has led to worries among authorities, with financial regulators telling banks to trim their loan books this year to guard against risks emerging from bubbles in domestic financial markets, sources told Reuters last month. (Full Story)

Despite the March surge, growth in outstanding yuan loans eased to 12.6% from a year earlier compared with 12.9% in February. Analysts had expected 12.6% growth.

"I personally believe social financing is a more important gauge... its growth rate is at a relatively low level (for March). If it continues to slide, the contraction in credit looks pretty evident," said Hao Zhou, senior economist at Commerzbank.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 12.3% in March from a year earlier and from 13.3% in February.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In March, TSF also missed expectations, when it rose to 3.34 trillion yuan from 1.71 trillion yuan in February. Analysts polled by Reuters had expected March TSF of 3.70 trillion yuan.

China's credit trends are being closely watched by investors who are increasingly worried about policy tightening as Beijing looks to exit from emergency measures now that the world's second-largest economy is quickly regaining momentum. The country's blue-chip share index .CSI300 fell over 5% in March, its worst monthly performance in a year. (Full Story)

Data last week showed inflation pressures are building, with a factory price gauge rising the most in nearly three years. (Full Story)

The central bank has pledged to stabilise the country's overall debt level which jumped last year due to stimulus measures, but has said it will avoid a sudden policy shift and will continue to support ailing small firms. (Full Story)

Ruan Jianhong, head of the PBOC's statistics department, told a briefing on Monday that China's marco leverage ratio jumped 23.5 percentage points in 2020 to 279.4%, but the rise in debt levels has slowed since the second quarter as the economy recovered.

The macro leverage ratio is a measurement of the debt held by Chinese central and local governments, households and companies divided by total gross domestic product (GDP).

Policymakers are especially concerned about financial risks involving the country's overheated property market, and have asked banks and local authorities to prevent business loans from flowing into real estate.

Last year, the central bank rolled out a raft of measures including cuts in interest rates and reserve ratios to support the economy. But it has kept the benchmark lending rate, the loan prime rate, unchanged since May.

"We think that credit growth will slow further over the rest of the year," said analysts at Capital Economics, citing factors such as the PBOC directive to control lending for the rest of year and lower local government bond quotas.

"There's typically around a six-month lag before shifts in credit growth show up in the wider economy: the credit slowdown will be a growing drag in the second half of the year."

Broad M2 money supply in March grew 9.4% from a year earlier, also below estimates of 9.6% forecast in the Reuters poll. It rose 10.1% in February.

Euro zone retail sales stronger than expected in Feb - Reuters News

BRUSSELS, April 12 (Reuters) - Euro zone retail sales were stronger than expected in February, data showed on Monday, as some countries eased their COVID-19 pandemic restrictions before tightening them again in March.

The European Union's statistics office said retail sales in the 19 countries sharing the euro rose 3.0% month-on-month in February for a 2.9% year-on-year fall. 

Economists polled by Reuters had expected a 1.5% monthly rise and a 5.4% year-on-year decline.

"Given that Italy saw restrictions ease in February, helped the 8.4% increase in sales while the Netherlands allowed in-store pickups of online orders from mid-February, which resulted in a 5.4% increase for the month," said Bert Colijn, euro zone economist at ING bank.

"The big question is whether eurozone consumers are eager to consume when the economy reopens," he said. "With involuntary savings built up substantially over the course of last year, there is significant potential for a rebound."