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NEW YORK: Brent crude touched a three-month high yesterday after better-than-expected European data spurred optimism over the global economy, but oil later pared gains on surprisingly weak US growth figures.
Sentiment drew further support from declines in US refined product stocks, although crude oil inventories rose sharply.
Brent crude futures were 24 cents higher at $114.60 a barrel by 12.01pm EST (1701 GMT) after hitting $115.24, their highest since October 16, 2012. US crude oil was down three cents at $97.54 a barrel.
The US economy unexpectedly contracted in the fourth quarter, suffering its first decline since the 2007-09 recession as businesses scaled back on restocking and government spending plunged.
US crude oil inventories jumped by 5.95 million barrels in the week to January 25, the US government said. Analysts had forecast a 2.6-million-barrel crude build.
But the recent run of economic optimism overshadowed the inventory numbers and weak US data.
“Overall, global macroeconomic trends such as the dollar and global equity indices hitting new 52-week highs have been pushing crude higher,” said Chris Jarvis, president of Caprock Risk Management in Boston.
Euro zone economic sentiment improved more than expected across all sectors in January, rising for the third month in a row in a sign that the region’s economy could be emerging from a low point in the fourth quarter of 2012.