Brent futures held above $112 a barrel on Tuesday as investor attention shifted back to demand after China's factory growth rose to a six-month high, adding to signs the economy of the world's second-biggest oil consumer is regaining strength.
Oil markets have for weeks been rattled by supply concerns due to the Ukraine crisis and as a takeover of large areas of Iraq by Sunni militants stoked fears of disruption in exports from OPEC's second-biggest producer amid unsteady shipments from Libya and others. As those fears recede somewhat, investors are looking for fresh clues to gauge the direction of the market.
Brent crudegained 7 cents to $112.43 a barrel by 0238 GMT, after ending down 94 cents at its lowest settlement since the rally spurred by the Iraqi crisis started on June 12. U.S. oil rose 17 cents to $105.54 a barrel.
"Markets are looking for a catalyst to see where prices are headed from here," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney.
"We certainly need to keep an eye on Iraq and see what is happening in Ukraine. But overall economic data, including those from the United States, seems to suggest the global economy is improving."
China's official Purchasing Managers' Index (PMI) stood at 51 in June, the National Bureau of Statistics said, quickening from May's reading of 50.8 and in line with market expectations on improving domestic and foreign demand.
Oil, particularly the U.S. benchmark, drew additional support from forecasts U.S. commercial crude inventories dropped 2.3 million barrels in the week to June 27, while product stockpiles rose, a preliminary Reuters poll showed. It also estimated distillate stockpiles rose 600,000 barrels, while gasoline inventories increased 800,000 barrels.
Source: Reuters
Oil markets have for weeks been rattled by supply concerns due to the Ukraine crisis and as a takeover of large areas of Iraq by Sunni militants stoked fears of disruption in exports from OPEC's second-biggest producer amid unsteady shipments from Libya and others. As those fears recede somewhat, investors are looking for fresh clues to gauge the direction of the market.
Brent crude
"Markets are looking for a catalyst to see where prices are headed from here," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney.
"We certainly need to keep an eye on Iraq and see what is happening in Ukraine. But overall economic data, including those from the United States, seems to suggest the global economy is improving."
China's official Purchasing Managers' Index (PMI) stood at 51 in June, the National Bureau of Statistics said, quickening from May's reading of 50.8 and in line with market expectations on improving domestic and foreign demand.
Oil, particularly the U.S. benchmark, drew additional support from forecasts U.S. commercial crude inventories dropped 2.3 million barrels in the week to June 27, while product stockpiles rose, a preliminary Reuters poll showed. It also estimated distillate stockpiles rose 600,000 barrels, while gasoline inventories increased 800,000 barrels.
