Oil held near $123 a barrel on Monday, supported by signs of an improving economy in China, and actual and threatened supply disruptions in the Middle East and Africa.
China’s official Purchasing Managers’ Index (PMI) hit an 11-month high in March, easing investor concern of a sharp economic slowdown in the world’s second-largest oil consumer.
Brent crude was up 2 cents to $122.90 a barrel by 0828 GMT. It ended the first quarter up 14.3 percent, its biggest quarterly rise since the first quarter of 2011. US crude eased by 10 cents to $102.92.
“The Chinese PMI numbers were much better than expected and that would have an impact on oil. This will help answer some of the questions over a potential hard landing in China,” said Ben Le Brun, a market analyst at OptionsXpress in Sydney.
Following the Chinese PMI figures, investors will be keeping an eye on US manufacturing data, the ISM index, due later on Tuesday for signs of economic health in the world’s biggest oil user.
Oil was also supported by the prospect of supply disruptions. US President Barack Obama said on Friday there was enough oil in the world market to allow countries to cut imports from Iran, OPEC’s second-largest producer.
In his decision, Obama said increased production by some countries as well as “the existence of strategic reserves” helped him come to the conclusion that sanctions can advance.
Iran and six world powers will meet in Turkey on April 13-14 for a round of talks over Tehran’s disputed nuclear programme, US Secretary of State Hillary Clinton said on Saturday.
While threats to Iranian supply are the main worry for oil markets, actual supply has been cut in Syria, Yemen and South Sudan. Top global oil exporter Saudi Arabia is pumping almost 10 million barrels per day, the highest in decades.
Sudan and South Sudan on Sunday accused each other of launching attacks in the oil-producing area straddling their border after a delay in talks aimed at ending hostilities.