Brent Approaches $110 As Global Demand Brightens

Brent crude oil made its way towards $110 on Wednesday morning as expectations for a fall in US crude stocks grew. The commodity traded at $109.75 at 6:20 GMT as investors saw the global demand outlook improving.

Demand was a key driver for oil prices this week after industry data out on Tuesday showed that US inventories fell unexpectedly last week. CNBC reported that the American Petroleum Institute’s data showed that gasoline stocks were down 441,000 barrels last week, a far cry from the 843,000 barrel gain that was expected. The figures helped offset the 1.45 million barrel rise in crude stocks when a 1.9 million barrel decrease was expected.

Now investors are looking for confirmation of the data as the more closely watched Energy Information Administration’s version of the report is due out later in the day on Wednesday.

Investors are expecting to see crude prices on the rise in the second half of the year as the world’s two largest consumers, the US and China, get their economies back on track. Recent economic data has shown that both nations’ economies are improving, which will likely translate into a better appetite for crude.

Tension in OPEC producer Iraq has also lifted the commodity’s price as investors worry about supply interruptions since a group linked to al Qaeda has taken control of the city of Mosul. The nation’s Oil Minister Abdul Kareem Luaibi has been working to reassure markets that the nation’s conflict will not impact oil prices, but many worry that the problem could escalate in the coming weeks.