LONDON — Brent crude rose towards $112 a barrel on Tuesday, just off an 11-week high hit in the previous session, as strong economic data boosted the demand outlook and continued outages in Libya maintained concern about supplies.
Brent prices rose almost 2% on Monday after data showed US factory activity expanded in November at its fastest pace in two-and-a-half years. That came after a report showing manufacturing growth in China, the world’s number two oil consumer, hit an 18-month high in November.
"Demand has been steadily growing in the US, and China’s economy is recovering. We could see a further increase in demand next year," Newedge commodity sales manager Yusuke Seta said in Tokyo.
Brent crude for January delivery was up 18c at $111.63 a barrel at 9.06am GMT, after touching $112.34 a barrel in the previous session, the highest since September 13.
US crude was up 30c at $94.10 a barrel, after settling up $1.10 on Monday.
Brent was also supported by news that two cargoes of Urals crude for December loading had been cancelled from the Baltic ports of Primorsk and Ust-Luga, after Russia approved a boost of deliveries to Belarus.
In Libya, where protesters had shut most oilfields and ports, production had risen slightly in the past two weeks, the country’s Deputy Oil Minister Omar Shakmak said in an interview on Monday.
But exports of just 130,000 barrels a day remain a fraction of the 1.4-million barrels a day the country exported only five months ago.
Opec output target unchanged?
Ministers from Organisation of Petroleum Exporting Countries (Opec) members Saudi Arabia and Algeria indicated on Monday that the oil cartel was likely to keep its production target of 30-million barrels a day unchanged for the first half of 2014.
"The market is in the best situation it can be, demand is great, economic growth is improving," Saudi Arabian Oil Minister Ali al-Naimi said.
Investors will also watch US third-quarter gross domestic product (GDP) data due on Thursday and nonfarm payrolls for November due on Friday for clues on whether improvements in the world’s biggest economy could prompt the Federal Reserve to announce tapering of its monetary stimulus at its meeting on December 17-18.
"Thursday’s employment numbers may drive prices a bit higher, but I don’t see Brent going above $113 in the coming days," Mr Seta said. "Until the end of the year, I don’t expect much upward or downward pressure."
In another important indicator of demand in the US, commercial crude oil inventories were forecast to have dropped an average of 600,000 barrels in the week ended November 29, a Reuters poll of analysts showed.
Data released by the US Energy Information Administration (EIA) last week showed that crude oil inventories rose by 3-million barrels for the week to November 22, the highest level for November on records dating back to 1982.
The Reuters poll comes ahead of weekly inventory reports from industry group American Petroleum Institute due at 9.30pm GMT on Tuesday and the latest EIA data on Wednesday.
