Brent crude edged above $110 a barrel this morning, after two sessions of losses, as investors switched their focus from the United States fiscal crisis to hopes that growth in top energy consumer China will pick up sooner than expected.
China will make policies more targeted and effective in 2013 to help the economy recover, state television quoted Chinese Communist Party leader Xi Jinping as saying yesterday, driving the region's stocks and commodity prices higher.
Gains were however limited by worries that any delay in an agreement to avert a fiscal crisis in the United States may push the world's top oil consumer into deep recession, darkening the outlook for world oil demand, given the debt crisis in Europe.
"The market is currently trading in a right range, conflicted between better growth expectations from China and the short-term worries of the US fiscal situation," said Mark Pervan, head of commodities research at Australia and New Zealand Banking Group.
Front-month Brent futures traded 31 cents higher at $110.15 by 07.18 GMT, after losing nearly 1 per cent in the previous session. US crude added 36 cents to $88.86.
Asian shares also rose to a 16-month high, led by surging Chinese stocks on hopes for stable growth, while copper rose to a near seven-week high.
Reuters
