U.S. crude prices gained a dollar to over $100.50 a barrel on Wednesday as data from China showed its economy grew faster than expected and a Libyan official said two main eastern ports were unlikely to export oil before August.
The gain in U.S. crude narrowed its discount to Brent oil, the international benchmark, to the lowest in four weeks.
China's improving outlook and the delayed Libyan port restarts ended oil's longest losing streak since 2010, which had pulled Brent down more than 8 percent since mid-June.
U.S. crude for August deliverywas up 84 cents at $100.80 a barrel at 1400 GMT, slightly below its intraday high of $101.
The Brent crude oil contract for Augustedged up 3 cents to $106.05 a barrel ahead of expiry at the close of the session. The September contract gained 40 cents to $107.28 a barrel.
Weak demand and the potential return of Libyan crude has weighed on Brent, with contracts for delivery next month falling to a discount versus those for later delivery, a market structure known as contango.
Prices were supported up by a report that Libya's two main eastern oil ports Es Sider and Ras Lanuf are unlikely to restart crude exports before August, traders said. [ID:nL6N0PR346]
"They haven't actually exported a single barrel from these ports yet, and as far as I know there are no signs of any exports," said Michael Barry, director at FGE energy consultants
in London.
Oil markets were already firming prior to the Libyan port delay after China published better-than-expected economic data.
"Hopes for a rebound in risk appetite now lie with China after it reported an uptick in the pace of economic growth," oil brokerage PVM said.
China's economy grew by 7.5 percent between April and June from a year ago, slightly above expectations and up from 7.4 percent in the first quarter, government data showed on Wednesday.
Its implied oil demand rose 2.6 percent compared with a year ago to 10.2 million barrels per day (bpd) in June, the highest since January 2013, according to Reuters calculations based on preliminary government data.
U.S. CRUDE STOCKS DOWN
In the United States, prices also rose on the expectation of strong industrial production and ahead of the publication of official inventory figures, to be released later on Wednesday.
Crude oil inventories fell 4.8 million barrels in the week ended July 11, data from industry group the American Petroleum Institute showed on Tuesday.
U.S. commercial crude oil inventories were forecast to have fallen 2.1 million barrels last week as refiners increased output, according to a Reuters poll of analysts.
The more closely watched weekly oil data from the U.S. government's Energy Information Administration (EIA) is due later in the day.
Investors also watched Libya, where oil output had risen to 588,000 bpd even as militia groups continued to fight among themselves for control of Tripoli's international airport in the country's worst violence in months.
In Europe, the United States and the European Union could impose new sanctions against Russia after Ukraine suggested Moscow was involved in an air strike that killed 11 people.
Analysts said that rising output was still putting downward pressure on oil prices.
"Yesterday the market was heavily sold and I think it's just bouncing back from those levels," said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London, adding that rising crude output could add downward pressure to prices.
"As U.S. crude output keeps increasing and the driving season (in the U.S.) comes to an end, weakness in Brent structure could feed into WTI," Bank of America Merrill Lynch said in a research note.
Despite Wednesday's gains, front-month crude prices have shed almost 10 percent since mid-June, while prices for next year have remained relatively firm, meaning the long-term oil curve has flattened.
The price spread between August 2014 and August 2015 Brent collapsed by almost 90 percent during the past month to under $0.8 per barrel, its lowest level since 2011.
Source: Reuters
The gain in U.S. crude narrowed its discount to Brent oil, the international benchmark, to the lowest in four weeks.
China's improving outlook and the delayed Libyan port restarts ended oil's longest losing streak since 2010, which had pulled Brent down more than 8 percent since mid-June.
U.S. crude for August delivery
The Brent crude oil contract for August
Weak demand and the potential return of Libyan crude has weighed on Brent, with contracts for delivery next month falling to a discount versus those for later delivery, a market structure known as contango.
Prices were supported up by a report that Libya's two main eastern oil ports Es Sider and Ras Lanuf are unlikely to restart crude exports before August, traders said. [ID:nL6N0PR346]
"They haven't actually exported a single barrel from these ports yet, and as far as I know there are no signs of any exports," said Michael Barry, director at FGE energy consultants
in London.
Oil markets were already firming prior to the Libyan port delay after China published better-than-expected economic data.
"Hopes for a rebound in risk appetite now lie with China after it reported an uptick in the pace of economic growth," oil brokerage PVM said.
China's economy grew by 7.5 percent between April and June from a year ago, slightly above expectations and up from 7.4 percent in the first quarter, government data showed on Wednesday.
Its implied oil demand rose 2.6 percent compared with a year ago to 10.2 million barrels per day (bpd) in June, the highest since January 2013, according to Reuters calculations based on preliminary government data.
U.S. CRUDE STOCKS DOWN
In the United States, prices also rose on the expectation of strong industrial production and ahead of the publication of official inventory figures, to be released later on Wednesday.
Crude oil inventories fell 4.8 million barrels in the week ended July 11, data from industry group the American Petroleum Institute showed on Tuesday.
U.S. commercial crude oil inventories were forecast to have fallen 2.1 million barrels last week as refiners increased output, according to a Reuters poll of analysts.
The more closely watched weekly oil data from the U.S. government's Energy Information Administration (EIA) is due later in the day.
Investors also watched Libya, where oil output had risen to 588,000 bpd even as militia groups continued to fight among themselves for control of Tripoli's international airport in the country's worst violence in months.
In Europe, the United States and the European Union could impose new sanctions against Russia after Ukraine suggested Moscow was involved in an air strike that killed 11 people.
Analysts said that rising output was still putting downward pressure on oil prices.
"Yesterday the market was heavily sold and I think it's just bouncing back from those levels," said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London, adding that rising crude output could add downward pressure to prices.
"As U.S. crude output keeps increasing and the driving season (in the U.S.) comes to an end, weakness in Brent structure could feed into WTI," Bank of America Merrill Lynch said in a research note.
Despite Wednesday's gains, front-month crude prices have shed almost 10 percent since mid-June, while prices for next year have remained relatively firm, meaning the long-term oil curve has flattened.
The price spread between August 2014 and August 2015 Brent collapsed by almost 90 percent during the past month to under $0.8 per barrel, its lowest level since 2011.
Source: Reuters
