BUSINESS - ECONOMY
| 2013-08-06Brent rises above US$109 on China data
BRENT oil rose above US$109 a barrel yesterday after promising China data, but prices may struggle to hold on to gains as risk premiums come off after Iran and the United States signalled a fresh will to end the dispute over Tehran’s nuclear programme.
China’s services sector expanded as new business orders recovered from a multi-year low in a rare sign of resilience. Investors are viewing the latest numbers as setting the trend for other key data due from the world’s No.2 oil consumer this week.
Brent crude gained seven cents to US$109, 02 a barrel in early trading swinging between a low of US$108, 30 and a high of US$109,30 earlier in the session. US oil rose 13 cents to US$107, 06, after slipping to US$106,01.
“Brent prices are reacting to macroeconomic headline data, “ said Natalie Rampono, an analyst at ANZ said. “The market may be seeing the latest PMI numbers as indicating that underlying demand could be picking up in China. But we at ANZ continue to remain cautious because the data out of China is mixed.”
Crude also drew support from worries over supply from key exporters such as Libya and Iraq and smaller supplier Yemen.
Libya’s oil exports were flowing at less than half the normal rates on Friday as strikes and protests kept major terminals shut in one of the worst disruptions to hit the North African OPEC producer in the past year.
Shipments from Iraq may be cut by between 400,000 and 500,000 barrels per day in September. Tribesmen blew up Yemen’s main oil export pipeline late on Saturday, halting the flow of crude.
But receding worries about supply, after comments from Iran and the United States suggested a possible improvement in bilateral ties, kept a lid on oil prices.
Newly elected Iranian President Hassan Rouhani has called for dialogue to reduce “antagonism and aggression”, while the United States has said it was ready to work with Rouhani’s government if it were serious about engagement.
China’s services sector expanded as new business orders recovered from a multi-year low in a rare sign of resilience. Investors are viewing the latest numbers as setting the trend for other key data due from the world’s No.2 oil consumer this week.
Brent crude gained seven cents to US$109, 02 a barrel in early trading swinging between a low of US$108, 30 and a high of US$109,30 earlier in the session. US oil rose 13 cents to US$107, 06, after slipping to US$106,01.
“Brent prices are reacting to macroeconomic headline data, “ said Natalie Rampono, an analyst at ANZ said. “The market may be seeing the latest PMI numbers as indicating that underlying demand could be picking up in China. But we at ANZ continue to remain cautious because the data out of China is mixed.”
Crude also drew support from worries over supply from key exporters such as Libya and Iraq and smaller supplier Yemen.
Libya’s oil exports were flowing at less than half the normal rates on Friday as strikes and protests kept major terminals shut in one of the worst disruptions to hit the North African OPEC producer in the past year.
Shipments from Iraq may be cut by between 400,000 and 500,000 barrels per day in September. Tribesmen blew up Yemen’s main oil export pipeline late on Saturday, halting the flow of crude.
But receding worries about supply, after comments from Iran and the United States suggested a possible improvement in bilateral ties, kept a lid on oil prices.
Newly elected Iranian President Hassan Rouhani has called for dialogue to reduce “antagonism and aggression”, while the United States has said it was ready to work with Rouhani’s government if it were serious about engagement.
