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Oil price boosted by China’s stockbuilding: IEA

The price of oil was up slightly in April, as China ramped up imports and tensions over Ukraine continued, according to the International Energy Agency (IEA).

Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom, March 23, 2014 near McKittrick, California.
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Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom, March 23, 2014 near McKittrick, California.

There was a sharp rise in Chinese crude oil imports, which implies that the world's second-biggest economy is starting to build up its energy stock – which can be a good forward indicator of economic growth. As its economic growth is currently slowing, China is also likely to be eying the security of its supply.

It has ramped up its imports from countries including Russia, Oman, Angola, Iraq – and even Iran, which sent over 600,000 barrels a day to China in April, the highest since June 2012.

Supply problems in oil-producing countries including South Sudan and Colombia also kept the price of oil relatively high. April is often when oil markets rebalance, as demand hits a seasonal low.

The ongoing controversy over eastern Ukraine, where pro-Russian separatists continue to scuffle with the Ukrainian military, also continued to keep prices up.

The IEA has raised its forecast for global oil demand growth for 2014 slightly, to 1.32 million barrels a day (mb/d).

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