Oil prices up in Asia on optimism about global growth

AP PHOTO

SINGAPORE— Oil prices edged higher in Asian trade Friday as positive economic data in energy guzzlers the United States and China spurred optimism about global demand, analysts said.

Prices were also supported by growing concerns about supply disruptions in the Middle East and Africa.

New York’s main contract, West Texas Intermediate for delivery in September, climbed 64 cents to $108.53 a barrel and Brent North Sea crude for September rose 50 cents to $110.04.

“Crude prices have reacted to global growth, with both US and China the top two largest users of crude,” Kelly Teoh, market strategist at IG Markets Singapore, said in a note.

“Signs of growth in these two economies are positive for crude prices,” she said.

The Institute for Supply Management on Thursday said its US manufacturing purchasing managers’ index (PMI) leaped to a two-year high of 55.4 in July, 4.5 percentage points higher than June’s 50.9 level.

A reading above 50 indicates growth, while anything below signals contraction.

China’s official PMI also showed a surprise increase to 50.3 last month from 50.1 in June, a rare piece of positive economic data from the Asian economic power, which has been slowing in recent months.

“It is clear the Chinese government is doing what it can to keep the economy going and it will not allow growth to miss the seven percent target,” Teoh said.

Meanwhile, investors are a keeping a close watch on potential supply disruptions in the Middle East and Africa, analysts said.

“Protests in Libya’s oilfields, insurgents targeting Iraq’s pipeline, technical problems and oil thefts in Nigeria (have) brought about worries about the availability of supplies,” said Lee Chen Hoay, investment analyst at Phillip Futures in Singapore.