LONDON—Oil prices rose on Thursday owing to lingering tensions over major crude exporter Iran and in the wake of positive Chinese economic data, analysts said.
New York’s main contract, light sweet crude for delivery in April, gained 12 cents to $107.19 a barrel.
Brent North Sea crude for April climbed 71 cents to $123.37 in London deals.
“Crude prices are extending gains, albeit modestly, with the Iranian situation again seen to be the main market driver,” said Jack Pollard, analyst at Sucden Financial Research.
“While we have heard little in the way of new developments, there is the feeling that the longer the situation persists the more volatile the nature of the situation may become with Iran pressured by international sanctions which is, ultimately, crude oil (price) positive.”
Oil futures had already risen on Wednesday, following two days of losses, amid more saber-rattling from Washington over Iran’s suspect nuclear program.
Western countries have imposed a raft of sanctions on Iranian oil exports in a bid to halt its controversial nuclear program, which they say masks a bid to build atomic weapons.
Tehran denies this charge and says its nuclear program is solely for peaceful civilian purposes.
Iran’s leaders have, however, warned they could close the Strait of Hormuz – a key transit route for global oil supplies – if increased Western sanctions halt Iranian oil exports.
On Tuesday, Israeli Prime Minister Benjamin Netanyahu warned that a nuclear-armed Iran would control the major Gulf oil producers, send energy prices soaring, and “choke” the global economy.
Analysts said crude futures were also winning support from data showing that manufacturing activity in China – the world’s biggest consumer of energy – expanded for the third straight month in February as export orders improved.
The official purchasing managers index (PMI) rose to 51 in February from 50.5 in January, with most sectors showing signs of improvement, the China Federation of Logistics and Purchasing said in a statement.
A reading above 50 indicates industry is expanding while a reading below 50 suggests it is contracting.
Markets have, meanwhile, shrugged off a bearish economic forecast from Federal Reserve Chairman Ben Bernanke and data showing a rise in crude stockpiles in the United States, which is the world’s largest oil consumer.
In a testimony to Congress, Bernanke said the US economy would expand at only about a 2.25 percent pace this year, lower than the fourth quarter 2011’s estimated 3.0 percent pace.
But Bernanke gave no hint as to whether the Fed was thinking of boosting its stimulus programs to counter the dull pace of expansion.