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Brent steady above $110 as economic growth, Libya support
May 23, 2014 / 3:46 AM / 3 years ago

Brent steady above $110 as economic growth, Libya support

* Brent near a 2-1/2-month peak reached on Thursday

* U.S., Chinese data supports oil demand prospects

* Libya’s Brega port shut by protesters

By Jacob Gronholt-Pedersen

SINGAPORE, May 23 (Reuters) - Brent crude held steady above $110 a 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 United States and China.

A recent rally in oil prices, which pushed Brent to a 2-1/2-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 2 cents at $110.34 a barrel by 0325 GMT. The contract settled 19 cents lower on Thursday, after touching a session high of $111.04, the highest since March 4.

U.S. crude gained 1 cent to $103.75 a barrel after settling 33 cents lower, but was still on course for its third weekly gain on the back of a steep drop in U.S. 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,” said Ken Hasegawa, commodity sales manager at Newedge Japan.

“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 U.S. 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,” said Hasegawa.

“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 bpd 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 Sunday’s election.

Little data was due ahead of the U.S. Memorial Day weekend. Floor trading will be closed on Monday and there will be no settlement on the New York Mercantile Exchange. (Reporting By Jacob Gronholt-Pedersen; Editing by Richard Pullin)

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