Brent rises to $37 amid brighter China outlook

Oil climbed from the highest close in more than seven weeks on speculation that monetary stimulus in China could help revive flagging economic growth in the world’s second-biggest fuel consumer.

Brent for May settlement gained as much as 48 cents, or 1.3 percent, to $37.05 a barrel on the London-based ICE Futures Europe exchange.

West Texas Intermediate for April delivery gained as much as 57 cents to $34.32 a barrel on the New York Mercantile Exchange and was $33.98 at 9:21 a.m. London time. The contract climbed 97 cents to $33.75 on Monday, the highest close since Jan. 6. Total volume traded was about 13 percent above the 100-day average. Prices rose 0.4 percent in February, the first monthly gain since October.

Futures advanced as much as 1.7 percent in New York as European equities climbed, after rising 3 percent on Monday.

China’s central bank cut its reserve requirement ratio by 0.5 percentage points on Monday, freeing up the amount of cash the nation’s banks can lend in an effort to cushion demand. OPEC production declined last month because of weaker output from Iraq, a Bloomberg survey showed.

“Oil is being supported by the cut in China’s RRR and signs of lower production around the world,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. “In principle, the cut in RRR should encourage lending, support the economy and therefore oil demand. At the same time, production seems to be slipping in the U.S., Mexico and even in OPEC.”

Oil has slipped about 8 percent this year and averaged under $32 a barrel during the past two months, the longest stretch below that level in more than 12 years. Output from the Organization of Petroleum Exporting Countries slid by 79,000 barrels to 33.06 million barrels a day in February. Saudi Arabian production remained unchanged while Iraq and Nigeria pumped less.

The global benchmark crude traded at a premium of 84 cents to WTI for May. The April contract expired Monday up 87 cents at $35.97.

U.S. crude inventories are rising even as producers struggle with low prices: