Brent crude held steady above $113 per barrel today as investors awaited economic growth data out of Europe to gauge the region's energy demand outlook, while escalating tensions in the Middle East supported prices.
Weak growth numbers from the euro zone could boost the dollar and weigh on commodities that are priced in the greenback. But crude should find a floor as an intensifying debate in Israel on whether to strike Iran's disputed nuclear programme stokes worries about supply from the region.
Brent crude gained 39 cents to $113.99 a barrel by 7am, after closing 65 cents up at its highest settlement since May 3rd. US crude gained 50 cents to $93.23 a barrel, after ending 14 cents lower.
"The immediate impact of the European growth numbers will be on the forex market and oil will react to that," said Ryoma Furumi, a commodities sales manager at Newedge Japan.
"Oil prices are high because of the Israel situation and a lot will depend on how that turns out."
France's economy recorded zero growth for a third straight quarter in the three months to end-June, while German GDP grew 0.3 per cent in the second quarter.
Numbers from both the euro zone powerhouses marginally exceeded expectations.
The dollar has weakened so far today, with the index down 0.17 per cent partly due to expectations central banks will initiate more measures to stimulate growth as the global economic outlook worsens.
Investors across markets stayed cautious ahead of the data with the euro holding on to gains, base metals edging lower and gold inching up on more policy hopes.
Apart from European growth numbers, markets were also eyeing July retail sales data from the United States for an indication on the health of the world's biggest economy.
Reuters
