Brent Above $86 To Begin The Week
Brent crude oil began the week above $86 after positive economic data from the U.S. helped boost demand expectations.
The commodity traded at $86.46 at 7:50 GMT as investors looked to China for a better picture of the global economy’s health.
China is due to release several data points on Monday, most notably the country’s third quarter GDP.
Financial Times reported that most are expecting the figures to show that the nation’s growth sputtered in from July to September, falling from a 7.5 percent rate of growth to a 7.2 percent rate of growth.
If the GDP data meets expectations, it will solidify speculation that the nation’s economy is struggling to maintain its momentum. Many believe that a disappointing GDP report could prompt Beijing to step in with more stimulus.
Meanwhile, U.S. economic data helped boost prices and suggested that the nation’s recovery was still on track despite some weak figures last week. The nation’s consumer sentiment rose to its highest level in since July 2007 to 86.4, above analysts’ expectations.
Geopolitical tension remained a concern for crude prices as conflict in the Middle East continued to escalate.
Over the weekend, Islamic Militants continued their offensive against Syrian border town Kobani. The town was hit hard on Sunday as ISIS attempted to regain ground after U.S. airstrikes pushed the radical group backward last week, with some stray shells crossing the border and hitting Turkey.
Worries about stability in Libya could also affect crude prices in the coming days as the nation is still struggling to find a comprehensive government. At the moment the nation’s output is around 800,000 barrels per day, just 60 percent of its normal capacity.
OPEC will also play a role in determining Brent prices in the weeks leading up to its annual meeting at the end of November.
The group isn’t expected to cut its supplies despite calls from some member nations to do so. Instead, countries like Saudi Arabia, Kuwait and Iran are all willing to accept the commodity’s low prices for an extended period in order to gain market share.
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