SINGAPORE: Brent crude futures rose towards $108 a barrel on Thursday as economic data from the United States and China brightened the outlook for demand in the world's two largest oil consumers.
Investors were also encouraged as the US Federal Reserve, after a two-day meeting, showed no signs of reducing the economic stimulus that has broadly underpinned commodity prices.
Brent crude oil futures had gained 24 cents to $107.94 a barrel by 0504 GMT, after ending July with the largest monthly percentage gain since August 2012.
US crude futures climbed 50 cents to $105.53, having settled nearly 2-percent higher the day before.
"The Fed has implied they are not rushing to shrink (their stimulus programme), so that's given positive sentiment to the market," said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo.
The US central bank on Wednesday said the economy continued to recover but was still in need of support, offering no sign it is planning to curb its bond-buying at its next meeting in September. Any tapering could boost the US dollar and drag on assets denominated in the currency.
Data which showed US private employers kept adding jobs in July at the same rate as the month before, fuelled optimism over the outlook for the US economy.
In No.2 oil consumer China, official numbers showed better-than-expected growth in factory activity, although a private survey showed the weakest reading since August 2012, moderating oil price gains.
"While the positive official PMI data will provide support to crude oil prices in the short-run, it does not alter our view of slower growth in China and dampened oil demand, with the HSBC PMI data continuing to contract," said Chen Hoay Lee, an investment analyst at Phillip Futures in Singapore.
"As Chinese policymakers attempt to rebalance the economy away from investment-and-export-driven growth towards consumption-driven growth, we expect this to affect growth adversely in the short-run," Chen said.
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