SINGAPORE: London crude prices extended gains on Tuesday , Feb 15 to stand above $103 a barrel, buoyed by signs of firm oil demand in China, and as unrest in the Middle East sparked fears of a potential supply disruption.
U.S. crude rebounded above $85 a barrel, after falling to 2-1/2 month lows in the previous session, pressured by high stockpiles at Cushing, Oklahoma.
Economic and industry data due later in the day -- U.S. weekly crude inventories from the American Petroleum Institute (API) and January retail sales -- will offer more trading cues for the market.
"Middle East tension will continue to support prices in the near term, but if that subsides, fundamentals will reassert themselves very quickly, with a lot of pressure emerging on the sellside," said Ben Le Brun, an analyst with CMC Markets in Sydney.
"There are still a lot of inventories in the U.S., and OPEC ministers have said previously that the market remains well-supplied."
Brent crude for April delivery rose 48 cents to $103.56 a barrel by 0310 GMT, after settling at $103.08 a barrel in the previous session, off an earlier 29-month peak of $104.30.
U.S. crude for March delivery rose 42 cents to $85.23 a barrel, after settling 77 cents down at $84.81 a barrel. The contract had fallen to $84.58 earlier, the lowest intraday price since Dec. 1.
The spread between the two grades was above $14, after hitting a record of $16.27 a barrel last week.
Although tensions eased after Egyptian President Hosni Mubarak stepped down and gave power to the army last week, protests in neighbouring Iran, Yemen and Bahrain and Algeria reignited fears of potential supply disruptions in other oil-producing nations.
Iranian security forces were deployed in Tehran to prevent an opposition rally, while government backers chased down pro-reform demonstrators in Yemen's capital, turning unrest increasingly violent. Bahraini police fired tear gas and rubber bullets to break up protests in villages ringing the capital Manama.
Also boosting crude prices were signs of robust demand in China, the world's second-largest crude importer, which consumes one-tenth of global supplies.
The country's January crude oil imports rose 27 percent from a year-ago to the fourth highest on record, as refiners raised production and beefed up diesel inventories to fight a drought.
China's consumer price data released earlier on Tuesday showed inflation was lower than expected at 4.9 percent in the year to January, but signs of a continued rise in price pressures reinforced expectations the central bank would stick to its course of monetary tightening.
A Chinese government think-tank said in a report on Tuesday Beijing is prepared to increase interest rates and banks' required reserve ratios further in 2011.
In the United States, crude oil inventories are likely to have risen for the fifth straight time last week as imports rebounded, a Reuters poll showed on Monday ahead of the weekly reports.
Industry group American Petroleum Institute will release its inventory data on Tuesday at 4:30 p.m. EST or 2130 GMT and the Energy Information Administration will issue its report on Wednesday at 10:30 a.m. EST.
The Commerce Department will release January retail sales at 1330 GMT later, and economists are expecting a rise of 0.6 percent.
The dollar index , which tracks the greenback's performance against a basket of major currencies, edged up 0.17 percent to 78.592. The index hit a three-week high of 78.873 overnight, and after the euro fell to a three-week low on worries over the euro zone's fiscal woes. - Reuters
U.S. crude rebounded above $85 a barrel, after falling to 2-1/2 month lows in the previous session, pressured by high stockpiles at Cushing, Oklahoma.
Economic and industry data due later in the day -- U.S. weekly crude inventories from the American Petroleum Institute (API) and January retail sales -- will offer more trading cues for the market.
"Middle East tension will continue to support prices in the near term, but if that subsides, fundamentals will reassert themselves very quickly, with a lot of pressure emerging on the sellside," said Ben Le Brun, an analyst with CMC Markets in Sydney.
"There are still a lot of inventories in the U.S., and OPEC ministers have said previously that the market remains well-supplied."
Brent crude for April delivery rose 48 cents to $103.56 a barrel by 0310 GMT, after settling at $103.08 a barrel in the previous session, off an earlier 29-month peak of $104.30.
U.S. crude for March delivery rose 42 cents to $85.23 a barrel, after settling 77 cents down at $84.81 a barrel. The contract had fallen to $84.58 earlier, the lowest intraday price since Dec. 1.
The spread between the two grades was above $14, after hitting a record of $16.27 a barrel last week.
Although tensions eased after Egyptian President Hosni Mubarak stepped down and gave power to the army last week, protests in neighbouring Iran, Yemen and Bahrain and Algeria reignited fears of potential supply disruptions in other oil-producing nations.
Iranian security forces were deployed in Tehran to prevent an opposition rally, while government backers chased down pro-reform demonstrators in Yemen's capital, turning unrest increasingly violent. Bahraini police fired tear gas and rubber bullets to break up protests in villages ringing the capital Manama.
Also boosting crude prices were signs of robust demand in China, the world's second-largest crude importer, which consumes one-tenth of global supplies.
The country's January crude oil imports rose 27 percent from a year-ago to the fourth highest on record, as refiners raised production and beefed up diesel inventories to fight a drought.
China's consumer price data released earlier on Tuesday showed inflation was lower than expected at 4.9 percent in the year to January, but signs of a continued rise in price pressures reinforced expectations the central bank would stick to its course of monetary tightening.
A Chinese government think-tank said in a report on Tuesday Beijing is prepared to increase interest rates and banks' required reserve ratios further in 2011.
In the United States, crude oil inventories are likely to have risen for the fifth straight time last week as imports rebounded, a Reuters poll showed on Monday ahead of the weekly reports.
Industry group American Petroleum Institute will release its inventory data on Tuesday at 4:30 p.m. EST or 2130 GMT and the Energy Information Administration will issue its report on Wednesday at 10:30 a.m. EST.
The Commerce Department will release January retail sales at 1330 GMT later, and economists are expecting a rise of 0.6 percent.
The dollar index , which tracks the greenback's performance against a basket of major currencies, edged up 0.17 percent to 78.592. The index hit a three-week high of 78.873 overnight, and after the euro fell to a three-week low on worries over the euro zone's fiscal woes. - Reuters
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