Brent Set To End The Week On A High

Brent crude oil looked poised to end the week above $110 as both supply and demand factors kept prices elevated. The commodity traded at $110.44, on track for a second week of gains as supplies from Libya tightened and the global demand outlook improved based on positive data.

Encouraging data from some of the world’s largest economies helped lift Brent prices as economic improvement is likely to translate into increased energy needs. Manufacturing data from the US and China, released on Thursday, showed that the top two oil consuming nations were picking up speed.

China’s factory sector turned in its best performance in five months with a reading of 49.7 for May, up from April’s 48.1. Reuters reported that although the figure still fell below the 50 point mark which separates expansion from contraction, many saw the improvement as a sign that the Chinese economy is on track for GDP growth.

In the US, manufacturing growth improved to a three month high in May and existing home sales picked up in April for the first time in several months. The data confirmed that the US economy was back on track in the second quarter despite stumbling in the first.

Supply disruptions in Libya remained a major driver for Brent prices as protesters continued to interrupt the nation’s oil output. On Thursday, the nation’s news agency reported that protesters had shut down the headquarters of the company which controls Libya’s only functioning Eastern port. Libya’s oil output has been depressed to about 230,000 barrels per day after a nine month standoff between rebel groups and the government.