Oil prices climb on global demand hopes
World oil prices rose on Friday, energised by hopes that recent strong global economic data will translate into higher crude demand, dealers said.
Brent North Sea oil for delivery in October rose ten cents to $110 a barrel in London early afternoon deals.
New York’s main contract, West Texas Intermediate (WTI) crude for September added 16 cents to $105.19 per barrel.
“Brent prices pushed higher at the end of the week following positive economic data released from China, the US, the eurozone and the UK,” said analyst Lucy Sidebotham at British-based energy consultancy Inenco.
“This showed the global economy to be recovering and could point towards higher oil demand.”
The number of Americans seeking unemployment benefits rose last week but the trend in layoffs continued to push lower, data showed Thursday.
Initial jobless claims totalled 336,000 in the week ending August 17, a gain of 13,000 from the prior week’s revised reading of 323,000.
In the eurozone, the preliminary composite purchasing managers index of business activity (PMI) hit a 26-month high of 51.7 points for August from 50.5 in July. Anything above 50 indicates expansion, while a reading below 50 points to contraction.
And in the United States the flash PMI came in at 53.9, up from a final July reading of 53.7.
The data followed a similar upturn in China, where HSBC said its PMI reading hit a four-month high of 50.1, adding to recent figures suggesting a slowdown in the Asian economic giant is coming to an end.
In Europe on Friday, British economic growth was upgraded to 0.7 percent for the second quarter, compared with the prior estimate of 0.6 percent.
The global oil market meanwhile remains supported by fears that the unrest in Egypt could spread across the Middle East and block off supplies.
Egypt’s toppled dictator Hosni Mubarak was transferred from prison to house arrest at a military hospital on Thursday, in a move overshadowed by a blistering crackdown against his Islamist successors.
The decision to grant Mubarak pre-trial release added a volatile new element to the political turmoil that has gripped Egypt since the army ousted Islamist president Mohamed Morsi on July 3 following massive protests against him.
More than 1,000 people have been killed in the past week in violence in Egypt.
Further oil price support stemmed from supply outages in Libya.
However, Libya’s National Oil Company announced a resumption of exports from the Brega terminal in the east, allowing it from Thursday partially to lift a declaration of force majeure.
Force majeure exonerates the NOC from its responsibilities in case it breaches contracts to supply oil, if it invokes exceptional circumstances
Their blockade caused production to plummet from 1.42 million barrels per day to 330,000 bpd before rising again to 670,000 bpd. AFP