Global oil prices have edged higher, erasing earlier losses, following signs of stronger-than-expected demand for crude in top consuming nation the United States, dealers say, according to Sky News.
Brent North Sea crude for delivery in March added 30 US cents to $US116.82 a barrel in London late Wednesday, Feb 7 afternoon deals. On Tuesday it had reached $US117.23 - the highest level since mid-September, propelled by a series of positive economic indicators.
New York's main contract, light sweet crude for March won 28 US cents to stand at $US96.92 a barrel in Wednesday trading.
The U.S. government's Energy Information Administration (EIA) announced Wednesday that American oil stockpiles climbed by 2.6 million barrels in the week ending February 1.
That undershot expectations for a larger gain of 2.9 million barrels, according to analysts polled by Dow Jones Newswires, indicating stronger-than-expected energy demand in the world's biggest economy.
“Although this showed a build of 2.6 million barrels last week, it nevertheless beat expectations. As a result, prices continued to retrace upwards,” said analyst Fawad Razaqzada at trading group GFT Markets.
The weekly report is a key focus for traders because the United States is the top oil consuming nation in the world, followed by China.
Crude futures had fallen in earlier trading as many traders took profits and the market was pressured by the stronger greenback, which makes dollar-priced crude more expensive for buyers using weaker currencies.
Analysts meanwhile pointed to a solid result in the Institute for Supply Management's January rating of the U.S. services sector for Tuesday's spike in prices.
Traders also eyed results from a European purchasing managers index, which suggested the continent was poised for a recovery. According to the data firm Markit, the indicator reached its highest level in 10 months.
Capital Economics research house pointed to a 'broad-based' recovery in the manufacturing sector worldwide, which is supportive of energy demand.
The forward-looking purchasing managers' indices for Latin America and emerging Asia 'have risen rapidly since mid-2012 and the latest figures point to a turnaround in emerging Europe too', it said.
