• Saturday, March 02, 2024
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Brent edges up to $111, but weak China data limits gains

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Brent rose to 111 dollars a barrel on Thursday on a drop in the U.S inventories and output cuts in Libya and South Sudan.

Factory growth in China – the second largest oil consumer – slowed in late 2013.

Meanwhile, the purchasing managers’ indexes published by the government and HSBC remained above 50 for December, indicating business activity is still expanding.

China’s factory activity expanded at the slowest pace in three months to December, according to the HSBC survey, consistent with views the economy’s growth rate has moderated.

“The Chinese PMI data were not exactly bullish,” IHS oil consultant Victor Shum said.

“The only thing supporting oil prices is probably the U.S inventories.”

February Brent crude edged up 20 cents from Tuesday to 111 dollars a barrel.

The U.S crude for February delivery was at 98.64 dollars, up 22 cents.

Markets were shut on Wednesday for the New Year.

Data from the American Petroleum Institute showed on Tuesday a drop of 5.7 million barrels in US crude stockpiles, nearly double the three-million-barrel draw expected by analysts surveyed by media.

The US Energy Information Administration (EIA) will release its data on Jan. 3 due to the holiday.

Lower US inventories helped buoy the West Texas Intermediate (WTI) oil price in 2013.

The average for the past year was 98.05 dollars a barrel, up 4.2 per cent from 94.14 dollars in 2012.

The average Brent price for 2013 was 108.70 dollars in 2013, down 2.7 per cent from 111.68 dollars in 2012.

Production in Libya, Iran, Iraq and the U.S will be closely watched this year, IHS’ Shum said, in addition to signs of further stimulus tapering by the US Federal Reserve.

In Libya, oil output is still less than 250,000 barrels per day (bpd), down from 1.4 million bpd in July, as ports in the eastern part of the country remain shut.

South Sudanese President Salva Kiir declared a state of emergency in two states on Wednesday.

Meanwhile, his negotiators prepare for peace talks with rebels to end more than two weeks of violence that has pushed the country towards civil war.

Iran and six world powers will implement an agreement in late January obliging Tehran to suspend its most sensitive nuclear work, an Iranian official said on Tuesday

Reuters