23 May 2014, News Wires – Brent crude held steady above $110 per barrel on Friday on track for a second weekly gain, supported by conflicts in Libya and Ukraine as well as positive economic data in the world’s top oil consumers, the US and China.
A recent rally in oil prices, which pushed Brent to a 2-month peak just above $111 on Thursday, could gain further momentum as Asian shares edged up to one-year highs on Friday on signs of improving momentum in the world’s biggest economies.
Brent crude was down $0.02 at $110.34 per barrel by Friday morning.
U.S. crude gained 1 cent to $103.75 per barrel after settling $0.33 lower, but was still on course for its third weekly gain on the back of a steep drop in US oil inventories last week.
“Brent managed to break through its previous high of $110.60, so I think there is scope for further gains over the coming week,” Newedge Japan commodity sales manager Ken Hasegawa said.
“But the contract faces solid resistance around $113 and should begin to come back down again,” he said.
The oil market was supported by signs of global economic growth, with US manufacturing growth picking up to a three-month high in May, and China’s factory sector turning in its best performance this year in May.
“The world economy is slowly and gradually getting better, but I don’t see any rapid growth in oil demand,” Hasegawa said.
“Brent has been trading within the $105 and $113 range, and I don’t see any dramatic changes to the fundamentals,” he said.
Oil prices were also supported by new supply disruptions in Libya. Protesters shut the headquarters of the company running the Brega oil port, the only eastern port to have remained open throughout most of the nine month stand-off with a rebel group, state news agency LANA said on Thursday.
Libya’s oil output was around 230,000 barrels per day on Wednesday, but the exact production level remained unclear on Friday.
Investors also kept an eye on the ongoing conflict in Ukraine – a main gas supply route for Europe from Russia – where presidential elections are scheduled for Sunday.
Ukraine said more than a dozen servicemen were killed on Thursday in an early morning clash with pro-Russian separatists, fuelling security concerns ahead of Sunday’s election.