SINGAPORE: Brent crude rose towards $111 a barrel on Wednesday on hopes of a revival in demand growth in the world's top oil consuming nation after US retail sales beat forecasts and oil inventories there rose far less than what was expected.
The solid 0.5 percent rise in December retail sales, compared with expectations of only a 0.2-percent increase, showed consumer resilience even in the face of automatic tax increases and government spending cuts. That added to evidence of a slow but steady recovery, and investors are now waiting for more data to gauge the global growth outlook.
Brent futures gained 39 cents to $110.69 a barrel by 0339 GMT. The February contract, which expires later in the day, settled $1.58 lower in the previous session, while the more heavily traded March Brent contract ended down $1.32.
US rose 30 cents to $93.58 a barrel.
Prices were also supported by data from the American Petroleum Institute that showed crude stockpiles rose by 46,000 barrels in the week to Jan. 11, compared with expectations for a 2.3 million barrel rise.
"US retail sales are important data, but not that substantial to trigger a rally in oil prices," said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo. "The market is looking for more positive factors to push prices higher and till then prices will trade in a tight range."
Emori expects Brent to trade between $109 and $111 a barrel and WTI between $92 and $94 until there is stronger evidence of an improvement in the global outlook.
One such number is China's gross domestic product growth, due on Friday, which is expected to show the country's annual economic growth quickened to 7.8 percent in the fourth quarter, according to a Reuters poll, snapping seven straight quarters of weaker expansion.
"I think China's economy has bottomed out," Emori said. "The downside risks to China have reduced and the economy is likely to show signs of improving."
Other issues holding back oil prices include concerns over a lack of agreement on the US debt ceiling, he said.
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