Brent crude held steady above $115 a barrel, after a $3 surge in the previous session, in line with a rebound in equity markets as a ruling by a top German court helped assuage fears that euro zone bailout efforts might get stalled.Prices were also supported by storms in the US Gulf Coast that have already shut in about 37 percent of oil production from the region. Investors are awaiting US president Barack Obama's speech on jobs and a European Central Bank rate-setting meeting later for clues on the health of the global economy."We saw equities rising and we saw oil put on a 3-4 percent (rise) last night," said Ben Le Brun, a Sydney-based analyst at CMC Markets. "We have Obama speaking about jobs and if the market gets what it wants to hear, that would further underpin the positive movements on oil prices."Brent crude slipped 22 cents at 0503 GMT to $115.58 a barrel, after gaining $2.91 to settle at $115.80, above its 100-day moving average, a key technical indicator that has capped the market since August. In post-settlement trade, prices rose further, pushing on to $116.50, the highest since August 2.
US crude gained 19 cents to $89.53 a barrel, after settling $3.32 at $89.34 a barrel, and also climbed in post-settlement trade to a five-week high of $90.48.
European stocks rose 3.1 percent, while on Wall Street, the S&P 500 rose 2.9 percent.
The positive mood extended into the Asian market, with Japan's Nikkei gaining 1 percent, while MSCI's broadest index of Asia Pacific shares outside Japan rose 0.5 percent.
The European Central Bank is expected to signal a change in policy direction on Thursday, halting a cycle of interest-rate rises just five months after it started as the euro zone debt crisis weighs on the economy.For Brent, the upside will be limited to $116.83 as a short-term uptrend that started at the Aug. 9 low of $98.74 approaches its end, said Reuters market analyst for commodities and energy technicals Wang Tao.
Prices were also supported by an industry report that showed a steep fall in oil stocks. Stockpiles of US crude fell by 3 million barrels last week due to production shut-ins and lower imports, industry group the American Petroleum Institute said.
That was well above the average forecast of a 1.9 million barrel draw in a Reuters poll ahead of the more closely watched data from the US government's Energy Information Administration on Thursday at 11 am EDT (1500 GMT).
In addition, three tropical storms - Nate, Maria and Hurricane Katia - are posing threats to Mexico's Bay of Campeche, Puerto Rico and the US East Coast.
Katia has weakened significantly in the last two days, but was still a hurricane with 80 mph (130 kph) winds, making it a Category 1 storm on the five-step Saffir-Simpson intensity scale.
In Libya, ousted leader Muammar Gaddafi's whereabouts have remained a mystery since rebel fighters stormed his Tripoli headquarters two weeks ago. Markets are awaiting an end to the months-long conflict to get a sense of when output from the nation can be restored.
"For Brent, it all comes down to when they can get some sort of definite answer as to when Libya can return to production," said Le Brun.
Fellow Middle East supplier Syria, subject to European and US import bans for its violent crackdown on anti-government protests, is now searching for new buyers for around 150,000 bpd of crude it typically exports - 99 percent of it to Europe - and hopes the world's biggest oil producer, Russia and major importer China will buy some of it, the country's finance minister told Reuters on Wednesday.
From / Arabian Business News