Brent climbs $100, demand worries stay


Brent crude had been above $100 per barrel since July 2012.

Brent crude rebounded above $100 per barrel on Wednesday while hopes the U.S. Federal Reserve will maintain its monetary stimulus after recent weak data also supported prices.

But concerns about oil demand growth, which pushed Brent to below $100 for the first time since July 2012 in the previous session, capped gains.

Brent crude for June 2012 delivery gained 33 cents to 100.24 dollars a barrel, after dropping to a session low of 98 dollars on April 16, the weakest since July 2012.

U.S. crude for May 2012 delivery slipped three cents to 88.69 dollars a barrel, off a 4-month low of 86.06 dollars hit on April 16.

“I think at this stage we are seeing a bit of bargain hunting,” said Ben Le Brun, analyst at OptionsXpress in Sydney.

He added that broader concerns on the state of the global economy remained in the market, capping oil price gains.

A rise in U.S. March housing starts to the highest since 2008 was a bright spot, but insufficient to turn oil sentiment bullish.

Brent crude shed almost six per cent over the past five sessions, biggest 5-day drop since September 2012, after data showed economic growth in China had slowed unexpectedly in the first three months of 2013.

While further weakness in Brent crude prices in the near term is not ruled out, oil prices will unlikely fall below the 100 dollars a barrel mark past the second quarter.

Societe Generale said it was keeping its Brent forecast for the second half of 2013 at 112 and 113 dollars a barrel, adding that the recent weakness in oil prices was seasonal and temporary.