LONDON: Brent crude oil rose above $109 per barrel on Thursday, consolidating after seven days of falls as better-than-expected data suggested the world economy was recovering, but analysts said the overall outlook for oil prices was bearish.
Britain rebounded from recession in the third quarter, posting its strongest quarterly GDP growth in five years, although the jump was subject to a number of temporary positive factors, including the Olympics.
The reading reinforced positive data from China and the United States that showed the world's top two oil consumers were weathering the global economic crisis.
Additional support for oil came from concerns about supply in Nigeria, which has lost at least a fifth of its oil output in recent weeks due to severe flooding and oil theft, government oil officials said.
Brent crude rose $1.20 cents to $109.05 a barrel by 1200 GMT, snapping a seven-day losing streak which was its longest since July 2010. US oil gained 75 cents to $86.48, after settling down for the fifth straight session.
"For the time being we're seeing a small short-covering bounce," said Tony Machacek, a broker at Jefferies Bache in London. "Longer term, maybe, we're due to be heading lower."
Analysts said a resumption of production in the North Sea and a cooling of geopolitical risks could push oil prices down.
"We expect Brent prices to ease towards $100 at year-end. The 2012 average remains $110," ABN Amro Commodity Research team said in a note to clients.
"With early elections in Israel (Jan. 22), the immediate threat of an escalation between Israel and Iran is pushed back towards the spring/early summer in 2013. (Therefore) a lower risk premium could be seen in the near term," it said.
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