Oil above $111, supply problems support
London, March 7, 2013
Oil held above $111 a barrel on Thursday as supply disruptions countered a higher-than-expected rise in crude inventories in top consumer the United States.
Investors were awaiting the outcome of the European Central Bank's (ECB) meeting later in the day and economic data this week to get a better picture on the prospects for oil demand in the world's top consumers.
Brent crude was up 12 cents at $111.18 a barrel by 1022 GMT. It has fallen from a 2013 high of $119.17 on February 8. US crude rose 27 cents to $90.70.
"The February correction is now over and the market in London is finding some support near $110, with a little help from fresh supply disruptions," said Andrey Kryuchenkov, analyst at VTB Capital.
"Still, near-term fundamentals do not justify sustained gains."
Brent has found some support this week from the unplanned shutdown of the Brent pipeline system in the North Sea - now being restarted - and disruption to exports of Nigerian crude.
Investors awaited ECB President Mario Draghi's news conference at 1330 GMT. The ECB is expected to hold interest rates at a record low. Earlier in the day, the Bank of Japan kept its policy unchanged as expected.
Oil came under pressure on Wednesday after a US government report showed crude inventories rose by 3.83 million barrels, much more than the 500,000-barrel increase analysts had forecast.
"The fact that US crude stocks surged nearly eight times more than expected does point to weaker demand, which will weigh on the WTI," said Ben le Brun, an analyst at OptionsXpress in Sydney, referring to Western Texas Intermediate, the US benchmark.
"We have a busy end of the week as far as macroeconomic data is concerned; the oil markets are watching out for those."
China's all-important trade data, including crude demand numbers, for February are scheduled to be released on Friday, as is the US non-farm payrolls jobs report. – Reuters