LONDON—Crude futures were higher Friday as a stronger euro and gains in equity markets helped support prices following news that G-20 officials are considering a boost to the International Monetary Fund's lending capacity.
Better-than-expected Chinese inflation data also helped to improve sentiment, raising hopes that the People's Bank of China won't resort to further interest rate rises, which could slow growth and oil demand.
The front-month November Brent contract on London's ICE futures exchange was up $1.48, or 1.3%, at $112.59 a barrel, after rising to a one-month high of $113.46 a barrel earlier in the day.
The front-month November contract on the New York Mercantile Exchange was trading up $1.07, or 1.3%, at $85.30 per barrel.
The gains in Brent were more pronounced than those in Nymex, sending the European benchmark's premium to Nymex to a record high of $28.07 a barrel.
The spread between Brent and Nymex has been closely watched in recent months since it flipped from its historic pattern at the beginning of the year as Nymex began to trade at an unusual discount to its European counterpart. The persistence of the trend has led some market participants to question the validity of Nymex as a global benchmark for oil prices.
The meeting of officials of the Group of 20 industrial and developing nations in Paris will likely be in focus throughout the day as markets look for any signs of how the crisis in the euro zone will be handled.
Prices were getting some support from optimism surrounding the two-day meeting, but analysts said that the current gains were on shaky ground, especially as signals from the euro zone look mixed.
Slovakia's yes vote on the region's bailout fund Thursday helped boost confidence that a solution to its debt crisis could be found, but downgrades to Spain's sovereign credit rating, as well as several European banks' ratings late Thursday, served as a reminder that the euro zone is far from out of the woods.
"I don't understand why the market continues to have upside momentum," said Myrtou Sokou, research analyst at Sucden Financial. "It's supported by a weaker dollar…but I didn't expect the market to be up this morning," she said.
A weak dollar usually means higher crude prices as the dollar-denominated commodity becomes cheaper for holders of other currencies.
