The price of oil rose on Monday, boosted by news of expanding exports in Germany and higher growth in electricity consumption and industrial production in China.
Exports from Germany, Europe’s largest economy, rose by 0.3 percent in October after dipping by 2.4 percent in September.
Analysts had expected German exports to continue their slide, so news of the rise lifted expectations that oil demand could improve.
By early afternoon on Monday, benchmark West Texas Intermediate crude for January delivery was up 79 cents at $86.72 a barrel in trading on the New York Mercantile Exchange.
Brent crude added $1.30, hitting $108.32 a barrel on the ICE Futures exchange in London.
Industry Minister Christian Paradis confirmed in an interview with CBC Radio that after “significant undertakings” in the areas of governance, transparency and disclosure, Chinese state-owned enterprise CNOOC (HKEX:0883,NYSE:CEO) was able to show that its bid for Nexen is likely to be of “net benefit” to Canada.
Natural Resources Minister Joe Oliver stated that while the new restrictions make it more difficult for state-owned foreign enterprises to acquire Canadian firms, Canada is still open to such firms taking minority positions in Canadian companies through joint ventures.
Markets were shaken early Monday as investors came to terms with the unexpected announcement that Italian Prime Minister Mario Monti plans to resign. While the news sent shock waves throughout European markets, it did not seem to affect oil prices.
Meanwhile, China’s November industrial output and retail sales exceeded forecasts, while inflation rebounded from a 33-month low – a sign many believe shows the country’s economic recovery is accelerating.
China’s National Bureau of Statistics revealed that factory production rose 10.1 percent in November from a year earlier. Retail sales growth accelerated to 14.9 percent.
Oil markets will be focused on this week’s meeting of the Organization of the Petroleum Exporting Countries, whose members produce approximately a third of the world’s oil supply.
Spartan Oil (TSX:STO) received an unsolicited offer from a third party to acquire all of the issued and outstanding common shares of the company. Spartan’s board of directors said it will further examine the unsolicited offer.
Last month, Pinecrest Energy (TSXV:PRY) announced a deal to acquire Spartan Oil on the basis of 2.738 common shares of Pinecrest for each outstanding Spartan share. Should Spartan Oil accept this new takeover bid it would pay Pinecrest a $12.5-million break-up fee
The company will acquire an additional 20-percent working interest in its operated leases in the Sleeping Giant area of the Elm Coulee field. Enerplus’ press release describes the asset as “a mature light oil property with an average decline rate of 14%.”
“We believe there is additional upside potential in this field through production optimization, refracs and limited infill drilling,” it adds.
Closing is expected by the middle of December, and would give Enerplus a 90-percent working interest in the operated leases, whose production is estimated at 7,300 barrels of oil equivalent per day.