LONDON: Brent crude oil steadied around $110 a barrel Monday after Chinese data showed strong industrial activity and as social and political unrest in Libya limited supply from the key North African producer.
Brent crude prices fell at the end of last week, losing more than $1 a barrel on signs of oversupply in international markets and worries over global economic growth.
But the official Purchasing Managers’ Index Monday showed manufacturing growth in China, the world’s biggest crude oil importer, at an 18-month high in November due to robust domestic and foreign demand.
Brent crude for January was up 40 cents at $110.09 a barrel after finishing down $1.17 in the last session. U.S. crude was up 60 cents at $93.32 a barrel, after settling 42 cents higher Friday.
“We are back around $110 after better-than-expected Chinese factory data,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.
Oil exports from Libya are only around 130,000 barrels per day, Deputy Oil Minister Omar Shakmak told Reuters in an interview Monday, more than 1.2 million bpd below pre-revolution supply levels.
“OPEC oil supply is also down a bit due to lost Libyan exports, keeping the market balanced,” Fritsch said.
Oil prices found some extra support from evidence that the Organization of the Petroleum Exporting Countries pumped less oil in November, mainly due to Libya. In recent weeks Libyan supply has fallen even further, Shakmak told Reuters, with total oil output down to just 224,000 bpd.
OPEC ministers are meeting in Vienna Wednesday to decide production policy, and ministers and OPEC officials have indicated the group’s output target is likely to stay unchanged at 30 million bpd. But next year production will need to be reduced as demand for OPEC oil will decline sharply, analysts say.