SINGAPORE: Brent futures rose above $108 on Thursday as positive economic data out of the world's top oil consumer the United States revived hopes of a recovery in demand growth, although a worsening outlook for Europe capped gains.
A surge in new US single-family home sales in September suggested the economy is gaining traction and closely followed data that showed No. 2 oil consumer China making a slow and steady recovery. Additional support for oil came from continued delays in the restart of the Buzzard oilfield, Britain's largest.
Brent crude had climbed 27 cents to $108.12 a barrel by 0531 GMT, snapping a seven day losing streak which was its longest since July 2010. US oil gained 33 cents to $86.06, after settling down for the fifth straight session.
"On the economic front, we have good news and bad news," said Yusuke Seta, a commodities sales manager at Newedge Japan. "The housing data looks good, but at the same time we have very worrying news out of Europe."
The uncertain economic outlook across the globe and swings between positive and weak data will keep Brent futures trading between $107.50 and $113 a barrel to the end of the year, Seta said.
Brent faces strong support at the lower end of that range, which is also the contract's 100-day moving average, he added.
Oil, particularly Brent, is drawing support from maintenance-related curbs to North Sea production. The Buzzard field in the North Sea is expected to restart on Oct. 25 or 26 as many as three days later than previously thought.
Buzzard is the largest of the fields that contribute to the Forties crude blend, the most important of the North Sea crudes underpinning the Brent crude benchmark.
"The Buzzard restart has been postponed several times and this supply problem continued to support Brent," Seta said.
The potential threat to supply from the violence in the Middle East and Iran's ongoing dispute with Israel and the West over its nuclear programme are also buoying oil.
Comments
Comments are closed for this article.