Brent crude rose towards $107 a barrel this morning amid worries about supply from North Africa, although speculation that strong US data could prompt the Federal Reserve to further taper its stimulus capped gains.
The reaction in oil markets to mixed Chinese trade data released earlier today was muted, with traders now waiting for a key report on US jobs that are forecast to have risen by a solid 196,000 in December.
“There is lots of second guessing going on about the Fed’s intentions and non-farm payrolls,” said Ben Le Brun, a market analyst at OptionsXpress in Sydney.
Brent crude was up 26 cents at $106.65 per barrel at 04.04 GMT, after settling 76 cents lower in a volatile session that saw the contract swinging by more than $2.
US oil was up 76 cents at $92.42 per barrel, after touching an eight-month low of $91.24 yesterday.
“Generally we see markets quieting down ahead of key data, but the geopolitical situation in the Middle East is feeding through to create a lot of volatility,” Mr Le Brun said.
“It is very much a double-edged sword. A positive jobs report will be supportive for oil prices, but then that could bring forward tapering. It’s very very hard to preempt.”
Oil prices were also underpinned by data showing Chinese crude imports rose by 13 per cent from a year ago to a record 6.31 million barrels per day in December.
But imports by the world’s No.2 consumer of oil after the United States rose by a smaller 4 per cent in 2013 versus a near 7 per cent year-on-year increase in 2012.
Chinese trade data for December was a mixed bag with exports growing a little less than expected at 4.3 per cent from a year earlier and imports outpacing forecasts with an increase of 8.3 per cent.
On the supply side, Saudi Arabia increased output last month to 9.819 million bpd, from 9.745 million bpd in November, a source said. The world’s largest oil exporter also raised supply to the market, which may differ from production depending on movement in or out of storage.
But unrest at Libyan ports seized by protesters has capped losses in Brent, though some traders say they anticipate exports from those ports to resume by the weekend.
Libya is now producing around 650,000 bpd of oil following the restart of the El Sharara field at the weekend, with the first exports from the western port of Zawiya expected to load around January 10-12.
Reuters
