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Markets

Oil prices edge higher

Published Updated

oil43LONDON: Crude prices rose slightly on Monday, supported by positive economic data from the world's biggest energy consumer China and against a background of tensions across the oil-rich Middle East, analysts said.

 

New York's main contract, light sweet crude for delivery in January, climbed 24 cents to $89.15 a barrel.

 

Brent North Sea crude for January added 39 cents to $111.62 a barrel in London midday deals.

 

"Crude oil prices are beginning the new week of trading up thanks to positive economic data from China," said Commerzbank analyst Carsten Fritsch.

 

Beijing at the weekend said that factory activity grew for the second month in a row in November, the latest figures showing the world's number two economy is emerging from its recent slowdown.

 

The country's official purchasing managers' index (PMI) reached 50.6, up from 50.2 in October and 49.8 in September and the highest since hitting 53.3 in April. Anything above 50 indicates expansion.

 

Fritsch said "geopolitical tensions in the Middle East" were also lending support to oil prices.

 

"Alongside Egypt, Syria, Iran and Gaza all remain latent trouble spots where the unrest could overspill into the oil production region in the Persian Gulf, where around a quarter of the world's crude oil is produced.

 

"Given this backdrop the oil price should remain well-supported, especially since financial investors are increasingly betting on climbing prices again," he added.

 

Israel's envoys in Paris and London were called in for consultations on Monday as the Jewish state came under huge diplomatic pressure over its settlement activities which the UN chief warned could wipe out peace hopes.

 

It was the latest in a series of top-level diplomatic protests over Israeli plans to build 3,000 settler homes in east Jerusalem and the West Bank that emerged on Friday with an official source confirming it was payback for the Palestinians winning the rank of a UN non-member observer state a day earlier.

 

Copyright AFP (Agence France-Presse), 2012

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