Brent oil rises above $109, buoyed by economic optimism

Brent crude rose above 109 dollars a barrel on Friday buoyed by optimism that monetary stimulus in the euro zone will lift economic growth and demand for fuel.

On Thursday, the European Central Bank launched a series of measures to pump money into the sluggish euro zone economy.

Investors are also eyeing key jobs data from the U.S. to reinforce hopes that the world’s largest economy and oil consumer is on a recovery path.

“Extra liquidity could mean more money for oil,” Carsten Fritsch of Commerzbank said.

“A rising tide lifts all boats.”

Brent rose 26 cents to 109.05 dollars a barrel.

U.S. crude was at 102.50 dollars a barrel, up two cents.

News of the European stimulus and elevated U.S. crude inventories widened Brent’s premium to West Texas Intermediate to settle above six dollars a barrel on Thursday.

Total crude inventories remain high in the U.S. although new pipeline capacities have drained stocks at WTI’s delivery point in Cushing, Oklahoma, to the lowest since 2008.

Oil’s gains were limited as market players eyed developments over Ukraine.

“The tension in Russia and Ukraine has eased somewhat post the Ukrainian elections,” said Mark Keenan, head of commodities research for Asia at Societe Generale.

France hopes a gathering of world leaders in Normandy on Friday to mark the 70th anniversary of the Allied D-Day landings will bring a thaw in the Ukraine crisis.

French diplomats say President Francois Hollande hopes to get Russian President Vladimir Putin at least to shake hands with Ukrainian president-elect Petro Poroshenko on the sidelines of the ceremonies.

Achieving this move could represent a first step in defusing tensions.

Reuters/NAN