Oil prices edge up on strong China, euro zone data

NEW YORK: Oil prices on both sides of the Atlantic edged higher as data from the US, China and the euro zone kindled hopes for better demand from three of the world’s largest energy consumers, and as oil exports from Libya stayed limited by strikes and unrest.
US manufacturing activity hit a five-month high in August as hiring picked up and new orders increased at their fastest pace since January, an industry report showed.
Business activity across the euro zone has picked up this month at a faster pace than expected, surveys showed, led by Germany as it benefited from growing demand for its exports.
Activity in China’s manufacturing sector also hit a four-month high as new orders rebounded, data showed.
This added to promising reports for July and raised hopes the world’s No. 2 economy may be stabilizing after a two-year slowdown.
“From a demand viewpoint, the China news is very supportive,” said Phil Flynn, an analyst with Price Futures Group in Chicago, Illinois.
“But you’re getting to the point where you have to balance good news with the possibility of taking away some of the stimulus.”
October Brent crude rose 10 cents to $109.91 a barrel by 10:46 a.m. EDT (1446 GMT).
US crude gained 41 cents at $104.26.
The US crude oil benchmark, also known as West Texas Intermediate, traded at a discount to Brent of $5.65 a barrel.
The Brent-WTI spread widened to $6.23 on Wednesday for the first time since June after signs US firms were diverting oil to the Cushing, Oklahoma, storage hub for the first time in 12 months.
Libya’s Marsa al Brega port, which local sources said reopened on Tuesday, may handle oil cargoes in the next few days, a shipping source close to the trade said.
But Libya’s oil exports are still close to their lowest levels since the civil war of 2011, with the largest terminals, Es Sider and Ras Lanuf, blocked by protesters for nearly four weeks.
Brent remained supported by political tensions in the Middle East and Africa.
Political crisis in Egypt has also stoked supply worries as the country is home to the Suez Canal and the Sumed pipeline, which together carry around 4.5 million barrels per day of oil between the Red Sea and the Mediterranean.
The Egyptian army has said it will guarantee the safety of the canal and pipeline, but any disruption could have a major impact on oil prices.