Brent oil futures hit a nine-month high near $119 a barrel on Friday after data showed strong growth in Chinese oil imports, rounding out four straight weeks of gains for the contract and taking its premium over U.S. crude to more than $23.
Chinese crude oil imports rose to the third-highest daily rate on record, and overall exports and imports were much stronger than expected, data showed, accelerating signs of a rebound in the world's second-biggest oil consumer.
Goldman Sachs, one of the most influential banks in commodity markets, said Brent's near $10 rally so far this year is "less driven by supply shocks and instead by improving demand".
"Global oil demand has surprised to the upside in recent months, consistent with the pick-up in economic activity," the bank's analysts said in a research note, which advised clients to maintain a long position in the S&P GSCI Brent Crude Total Return Index.
Brent rose to a peak of $119.17 a barrel, the highest since May, and settled up $1.66 at $118.90, a 1.8 percent increase from last week.
U.S. crude lost 11 cents to $95.72 a barrel and posted its first weekly loss in nine weeks, finishing down 2 percent from last Friday's level. Brent's premium over U.S. crude rose to $23.18, extending its recent gain to the highest since December.
The spread has expanded from around $14.50 in mid-January as refinery maintenance in the U.S. Midwest, restricted pipeline flows to the U.S. Gulf Coast, and buoyant production have kept stocks high around Cushing, Oklahoma, delivery point for the benchmark contract.
On Friday, IIR Energy reported Phillips 66 is due to shut two crude units with a combined capacity of 290,000 barrels per day at its Wood River, Illinois refinery late this month, further weighing on U.S. crude prices.
Traders were also watching a powerful blizzard in the northeastern United States that could drop up to three feet (nearly one meter) of snow from Friday to Saturday and bring travel to a halt.
Motorists, mindful of the severe fuel disruptions after last year's Hurricane Sandy, rushed to buy gasoline, leading to some shortages in parts of New York City.
U.S. heating oil futures rose to near $3.24 a gallon.
"We're seeing a big move in heating oil ahead of the storm," said Phil Flynn, analyst at Price Futures Group in Chicago.
"The distillate (diesel, heating oil and jet fuel) supply situation may be helped by all the flights being cancelled and gasoline demand may be lower with people staying home," Flynn added.
China's trade data for January showed a surge in exports and imports that confirmed a rebound in the world's second-biggest economy.
China's crude oil imports last month rose 7.4 percent from a year earlier to 5.92 million barrels per day, the third-highest daily rate on record, official data showed, as refineries ramped up production ahead of the Lunar New Year.
Oil was also supported by tensions in the Middle East and enduring worries about oil supply from the region.
Iranian supreme leader Ayatollah Ali Khamenei on Thursday rejected a U.S. offer for bilateral talks, compounding concern about the most prominent oil market risk factor.
Currently, U.S.-Iran contact is limited to talks between Tehran and a so-called P5+1 group of powers on Iran's disputed nuclear programme that are to resume on Feb. 26 in Kazakhstan.
Supply concerns were exacerbated when attackers blew up Yemen's main oil export pipeline on Friday, halting the flow of crude, an official working for the state-run Safer oil company said. (Additional reporting by Robert Gibbons and David Sheppard in New York and Peg Mackey in London.; Editing by Dale Hudson, William Hardy, James Jukwey and Gunna Dickson)