20 May 2013, News Wires – Brent crude futures held below $105 per barrel on Monday supported by positive economic data and strong equity markets, while a moderate outlook for demand and ample supplies dragged on prices.
Asian stock markets edged higher, boosted by US equities hitting record closing highs on Friday as consumer sentiment in the world’s biggest economy jumped to a six-year peak and a gauge of future economic activity rose its highest in five years.
But that was set offset by a weaker oil demand growth forecast for 2013 as well as higher supply forecasts by the International Energy Agency last week.
“The oil market is getting into what I think will prove to be the top-end of the range,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
“Primarily the outlook for demand growth is pretty moderate and the markets are well supplied with high inventory levels, so we’ll struggle to get past the resistance levels.”
Front-month Brent futures stood at $104.60 per barrel early on Monday, down 4 cents from Friday’s close and following three straight sessions of gains. US crude slipped 5 cents to $95.97.
Brent faces technical resistance between $104.50-$106.50, and may trade in a range of $101-$106.50 per barrel this week, Spooner said.
The IEA last week forecast an 8% growth in world oil demand on aggregate between 2012 and 2017, while supplies outside the Organization of Petroleum Exporting Countries are expected to rise 10%.
Brent could rise to $105.94 if it breaks through resistance at $104.82 per barrel, according to Reuters market analyst Wang Tao. US crude may drop towards $94.78 as it hasn’t been able to convincingly break through resistance at $95.98, he added.