Supply disruptions in the North Sea and Iran offset fears over lower fuel demand in China
Brent crude held above $101 a barrel on Friday as China, the world's second-largest oil consumer, posted economic growth in line with expectations, while supply disruptions in the North Sea and Iran provided additional support.
China grew at 7.6 percent in the second quarter from a year ago. That was the slowest pace since 2009 as two of its biggest markets - the European Union and the United States - remain weak. Yet the data relieved investors who had worried the numbers would come in much lower.
Brent crude rose 21 cents to $101.28 a barrel by 9.27am UAE time. US crude was at $86.24, up 16 cents.
"The market, at the moment, seems quite happy that the Chinese data weren't drastically lower," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.
"Weaker expectations have already been factored into the market," he said, adding that investors would look ahead to more data out of the United States and Europe to take the pulse of the global economy.
China's refinery throughput fell for the third straight month in June as its economic growth slowed. The country is expected to account for nearly half the world's incremental oil demand, ac c ording to the International Energy Agency.
Analysts hope China's growth will pick up in the third quarter as Beijing further loosens monetary policy and fast-forwards infrastructure spending, boosting its demand for commodities.
Brent is set to post a third straight week of gains by the end of Friday after suffering in the second quarter its largest three-month loss since the 2008 financial crisis.
Oil rose after the euro zone debt resolution last month and as jitters over supply from Iran and the North Sea spurred appetite among investors for riskier assets.
The United States ramped up pressure on Iran's ability to export oil on Thursday, identifying Tehran's main tanker firm and exposing dozens of its vessels as government-controlled entities. The measures aim to deprive Iran of oil revenue, to pressure it to rein in its nuclear program, which Tehran maintains is solely for peaceful purposes.
Production upsets in the North Sea and a potential record-low export volume in August also supported Brent.
Britain's largest oilfield, Buzzard, suffered a glitch, causing its output to fall to as low as 50,000 barrels per day, or a quarter of normal, earlier this week, traders said. It was unclear if production had returned to normal.
Forecasts of lower fuel demand growth in 2012-2013 due to a global slowdown capped oil prices.
The International Energy Agency said on Wednesday the global economic slowdown could put a lid on oil prices, but "nasty supply surprises" could reignite a market rally.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.