By Jacob Gronholt-Pedersen
SINGAPORE (Reuters) – Brent crude held steady above $110 a barrel on Friday, set for a second straight week of gains, supported by conflicts inĀ LibyaĀ andĀ Ukraine as well as by positive economic data in the world’s top two oil consumers, theUnited StatesĀ andĀ China.
A recent rally in oil prices, which pushed Brent to a two-and-a-half-month peak just above $111 on Thursday, could gain momentum as Asian shares edged up to one-year highs on Friday on signs of improving growth in the world’s biggest economies.
Brent crude was up 12 cent at $110.48 a barrel by 0712 GMT. The contract settled 19 cents lower on Thursday, after earlier touching $111.04, the highest since March 4.
U.S. crude gained 4 cents to $103.78 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,” saidĀ 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.
Positive U.S. and Chinese manufacturing data released on Thursday provided support by boosting optimism for future oil demand growth. Manufacturing growth in theĀ United StatesĀ picked up to a three-month high in May, whileĀ China’s factory sector turned in its best performance this year in May.
The data failed to lift prices substantially in a market driven by geopolitical factors and falling crude inventories.
“Mostly stronger data in theĀ United StatesĀ andĀ ChinaĀ failed to support energy markets, although with tighter inventories expected in the coming months, momentum remains positive,” analysts at ANZ said in a note.
Oil prices were also supported by new supply disruptions inĀ 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 government’s 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 (bpd) on Wednesday, but the production level was unclear on Friday.
Investors also kept an eye on the ongoing conflict inĀ UkraineĀ – a main gas supply route toĀ EuropeĀ fromĀ RussiaĀ – where presidential elections are scheduled for Sunday.
UkraineĀ 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 vote.
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.
