Oil prices increased on Friday, Brent went above $109 a barrel on expectations of steady demand growth, as the manufacturing sector in China expanded in October.

Brent crude increased by seven cents to $109.41 a barrel, while US crude grew by 11 cents at $96.49, reported Reuters.

Oil prices started increasing after the National Bureau of Statistics and China Federation of Logistics and Purchasing data revealed that China’s purchasing manager index (PMI), a measure of the country’s manufacturing activity, increased to 51.4% in October from 51.1 in September.

The October results were attributed to expanding production and confidence arising from government policies to stabilise growth and restructure the economy.

China’s gross domestic product (GDP) also increased to 7.8% in the third quarter, up from 7.5% in the second quarter.

Libya’s disruption, which is putting a strain on global oil supply, is impacting the crude prices.

Prices dropped in the early session following US Energy Information Administration (EIA) data, which showed crude oil production rose slightly in September and October and resumption of Libyan crude exports, which showed little improvement in this week.

Pressure was built in European benchmark overnight as traders sold the spread between the contract and the US crude benchmark after differences in the price level compared to last six months.

Brent value increased this week as Libya’s crude oil exports dropped by ten percent of capacity, or 90,000 barrels per day, compared with a capacity of more than 1.25 million bpd, worrying in short fall of oil supply.

Image: Brent value increased after a rise in China’s manufacturing sector. Photo courtesy of Ecow.

Nri energy