adminLONDON. – Oil rose US$1 towards US$109 a barrel yesterday as upbeat economic data from China and Europe pointed to a stronger demand outlook and unrest in Libya and Iraq disrupted supplies. China’s official purchasing managers index came in higher than expected yesterday and a survey showed eurozone manufacturing returned to growth in July, suggesting the region may pull out of recession this quarter.
Brent crude gained US98c to US$108,68 a barrel after ending July with the largest monthly percentage gain since August 2012. US crude climbed US$1,17 to US$106,20.
“The main reason is better than expected data from China and also the fact that the Fed (Federal Reserve) did not give any hint about ceasing stimulus,” said Commerzbank analyst Carsten Fritsch in Frankfurt.
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. That stimulus has broadly underpinned commodity prices.
Further brightening the US economic outlook, a survey showed private employers added 200 000 jobs in July, offering hope the government’s comprehensive employment report today could also indicate healthy job gains.
Concern over supplies from Libya, Iraq and Nigeria is also underpinning prices. The disruptions helped trim Organisation of Petroleum Exporting Countries output to a four month low in July, according to a Reuters survey.
Europe’s biggest oil company, Royal Dutch Shell, said yesterday a surge in oil theft in Nigeria was among the
factors that hit its second-quarter profit.
Lending further support, oil inventories at the Cushing, Oklahoma, delivery point for the US crude contract fell for a fifth straight week, government data showed on Wednesday, although overall stocks increased. – BDlive.
Bongani Ndlovu
Online Reporter