LONDON: Brent crude oil prices held above $112 a barrel on Thursday, supported by upbeat manufacturing data from China and Germany, but US crude stocks remained in focus after capacity in the Seaway pipeline was reduced.
Brent crude futures for March delivery were down 18 cents at $112.62 a barrel by 0939 GMT, underpinned by positive economic activity data from China and the eurozone. A stronger dollar was applying downward pressure to offset this.
"Brent continues to trade sideways - we have moved gradually higher since the beginning of the week, but oversupply is still hampering moves to the upside," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt. "However, the Chinese PMI data will help maintain the upwards move."
US crude was up 37 cents at $95.60, rebounding from a 1.5 percent fall on Wednesday after a cut in the flow rate in the Seaway pipeline, raising fears of further stock builds at delivery point Cushing, Oklahoma.
"Overall the mood in Brent is cautiously positive but some concern has crept into the WTI market, which will keep the focus on the EIA inventory data coming out this afternoon," said Ole Hansen, head of commodity strategy at Saxo Bank.
Growth in China's factory sector accelerated to a two-year high in January, HSBC's flash purchasing managers' index showed, suggesting the country's economy was rebounding and demand for commodities such as oil should pick up.
"We're expecting the second quarter to be better than the first in terms of GDP growth in China," Natalie Rampono, a commodities analyst at ANZ said. "Given that the data was better than expected, the markets could move higher in the rest of the day."
China's oil demand could grow by more than 7 percent to 11.3 million barrels per day (bpd) this year, she added.
The eurozone also took a step closer to recovery with Markit's Flash Composite Eurozone Purchasing Managers' Index jumping to 48.2 in January from December's 47.2, smashing expectations for a rise to 47.5.
