LONDON: Brent crude rose above $110 a barrel yesterday, buoyed by upbeat business surveys that suggested the global economy is on the mend and kindled hopes for higher fuel demand.
Manufacturing activity in the United States and China rose to multi-month highs while growth in the euro zone was better than expected, pointing to a potential uptick in world oil consumption.
“Over the last couple of days, more and more signals have emerged that point to an improving economic situation in the US,” said a JBC Energy report.
Brent crude climbed 49 cents to $110.39 a barrel by 1326 GMT. US crude was down 19 cents at $104.84.
The positive economic data combined with tension in the Middle East to boost oil. Traders continued to keep a close watch on Egypt and Libya.
“I view the overall oil landscape as mostly biased to the bullish side and expect the view to remain in this pattern until there are signs that the supply issues that have been plaguing the global supply and demand balances begin to recede,” said Dominick Chirichella of New York’s Energy Management Institute.
The crisis in Egypt has stoked supply worries as the country is home to the Suez Canal and the Sumed pipeline, which together carry around 4.5 million barrels per day of oil between the Red Sea and the Mediterranean.