Forexpros – Crude oil futures were up for a second day on Tuesday, climbing above the key USD100-a-barrel level as stronger-than-expected Chinese economic data eased fears over a ‘hard landing’ in the world’s second largest oil consumer.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD100.67 a barrel during European morning trade, rallying 1.82%.
It earlier rose by as much as 1.95% to trade at USD100.90 a barrel, the highest since January 12.
Official data released earlier showed that China’s economy expanded at an annualized rate of 8.9% in the fourth quarter, slowing from the previous quarter’s 9.1% rate, but slightly better than expectations for an 8.8% increase.
China is the world’s second largest consumer after the U.S. and has been the engine of strengthening demand.
Weakness in the U.S. dollar also contributed to gains, as it makes the dollar-priced commodity cheaper for holders of other currencies. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.5% to trade at 81.25.
Meanwhile, markets continued to monitor potential disruptions to Iranian oil exports after reports surfaced that France was pushing for faster enforcement of the European Union’s proposed embargo on oil imports from Iran.
Foreign ministers from the 27 European Union member states are scheduled to decide on sanctions on January 23 in Brussels.
Oil prices have been well-supported in recent weeks on fears that Iran may make good on threats to cut off access to the Strait of Hormuz in retaliation to international sanctions.
The Strait of Hormuz is one of the most important oil-shipping channels in the world, handling about 33% of all ocean-borne traded oil, according to the U.S. Energy Information Administration.
On Monday, the Iranian Foreign Ministry confirmed that it received a letter from the U.S. concerning the Strait of Hormuz, “via three different channels,” although the contents of the letter were not disclosed.
Supply concerns in Nigeria eased somewhat after Nigerian labor unions called off strikes and protests that threatened to shut down output in Africa’s biggest oil producer.
Markets largely shrugged off Standard & Poor’s decision to downgrade the triple-A rating of the euro zone’s bailout fund, the European Financial Stability Facility, by one notch late Monday.
The threat of a default by Greece continued, as talks aimed at negotiating a restructuring of the country’s debts remained deadlocked, amid disagreements over a bond swap with private creditors.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery rose 0.67% to trade at USD112.08 a barrel, with the spread between the Brent and crude contracts standing at USD11.41 a barrel.
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