SINGAPORE (Reuters) – Brent futures rose above $ 108 on Thursday as positive economic data out of the world’s top oil consumer, the United States, revived hopes of a recovery in demand growth, although a worsening outlook for Europe capped gains.
A surge in new U.S. single-family home sales in September suggested the economy is gaining traction and closely followed data that showed No. 2 oil consumer China making a slow and steady recovery.
Additional support for oil came from continued delays in the restart of the Buzzard oilfield, Britain’s largest.
Brent crude had climbed 22 cents to $ 108.07 a barrel by 0327 GMT, snapping a seven day losing streak, the longest since July 2010. U.S. oil gained 13 cents to $ 85.86, after settling down for the fifth straight session.
“On the economic front, we have good news and bad news,” said Yusuke Seta, a commodities sales manager at Newedge Japan. “The housing data looks good, but at the same time we have very worrying news out of Europe.”
The uncertain economic outlook across the globe and swings between positive and weak data will keep Brent futures trading between $ 107.50 and $ 113 a barrel to the end of the year, Seta said.
Brent faces strong support at the lower end of that range, which is also the contract’s 100-day moving average, he added.
Oil, particularly Brent, is drawing support from maintenance-related curbs to North Sea production. The Buzzard field in the North Sea is expected to restart on October 25 or 26 as many as three days later than previously thought.
Buzzard is the largest of the fields that contribute to the Forties crude blend, the most important of the North Sea crudes underpinning the Brent crude benchmark.
“The Buzzard restart has been postponed several times and this supply problem continued to support Brent,” Seta said.
The potential threat to supply from the violence in the Middle East and Iran’s ongoing dispute with Israel and the West over its nuclear programme are also buoying oil.
SHARP STOCK RISE
Prices were under pressure from data showing U.S. crude stocks rose sharply last week as imports increased and refinery utilization fell. Stocks climbed by 5.9 million barrels, the Energy Information Administration reported. Analysts polled by Reuters had forecast an increase of 1.9 million barrels.
U.S. gasoline inventories rose by 1.44 million barrels, compared with analyst expectations for a 700,000-barrel climb. Distillate stocks, which include diesel and heating oil, fell by 646,000 barrels in the week, compared with analyst forecasts for a drop of 900,000 barrels.
“A build in crude and gasoline inventories that was greater than expected coincided with the reporting of a draw in distillate stocks that was smaller than the anticipated,” analysts at BNP Paribas said in a report.
“It leaves national crude stocks 11 percent above last year and, combined with the continuing crude overhang at Cushing (40 percent above last year), the ample crude stock position helps to weigh on crude prices,” they said, referring to the Cushing trading hub in Oklahoma.
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Brent rises above $108 on promising US data, but Europe woes weigh
