Forexpros – Crude oil futures held steady on Thursday, as concerns over the global economic outlook were countered by persistent fears over a disruption to supplies from Iran.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD107.10 a barrel during European morning trade, easing up 0.03%.
The April contract traded in a range between USD106.56, the daily low and USD107.25, the session high.
Investors digested a pair of key Chinese manufacturing surveys released earlier, one from a government-backed group and another from HSBC Holdings.
The reports painted a mixed picture of China’s manufacturing sector. The official China manufacturing Purchasing Managers’ Index rose to 51.0, indicating mild expansion. But HSBC’s subsequent PMI release came in at 49.6, remaining in contract ion territory for the fourth consecutive month.
China is the world’s second largest oil consuming nation and manufacturing numbers are used as indicators for future fuel demand growth.
Meanwhile, in the U.S., Federal Reserve Chairman Ben Bernanke expressed a cautious view on the domestic recovery, while refraining from suggesting a third round of bond-buying.
In testimony before Congress on Wednesday, Fed chair Bernanke said the U.S. recovery remains uneven while oil-driven inflation risks will be temporary and global market issues continue to pose downside risks.
Bernanke acknowledged the improvement in the U.S. economy, noting “some positive developments” in the labor market. He said the drop in the jobless rate is “somewhat more rapid than expected,” though he added the job market is “far from normal.”
Also Wednesday, a weekly government report showed that U.S. crude supplies rose by 4.2 million barrels last week, above expectations for a 1.2 million barrel increase.
Total U.S. crude oil inventories stood at a five-month high of 344.9 million barrels as of last week, raising concerns over a slowdown in U.S. oil demand.
But prices remained supported as oil traders continued to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region.
Growing tensions between Iran and Israel also remain in focus. There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing.
Israel and the U.S. have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons.
Global financial service provider Barclays said in a report Wednesday that oil prices could average USD135 a barrel in 2012 if international relations with Iran deteriorate, compared with a current forecast of USD115.
“We still contend that the risk of either an Israeli or a U.S. strike on the Iranian nuclear facilities is low, but it has risen, in our view, from 5%-10% last year to 25%-30% now,” the bank said in a report.
Iran produces about 3.5 million barrels of oil a day, making it the second largest oil producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery rose 0.6% to trade at USD123.38 a barrel, with the spread between the Brent and crude contracts standing at USD16.28.
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