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Oil prices rose today as a result of an increase in equity markets and over speculations of a recovery in demand growth, after both the US and China released positive economic data.

Brent crude jumped by six cents to $111.67 a barrel, while US oil gained by two cents to $90.84, reported Reuters.

According to analysts, Brent may rise to $120 a barrel and US oil to $100 by summer, driven by an optimistic economic outlook.

On Tuesday, Dow Jones industrial average reached a record closing high, on the indication of an improving US economy and continued support from the Federal Reserve.

An industry report has shown that the US services sector recorded the fastest growth for a year in February, supported by a spurt in new orders and demand for exports, while the US ISM non-manufacturing index reached 56.0 in February, indicating robust growth.

"Dow Jones industrial average reached a record closing high, on the indication of an improving US economy."

Investors are keeping a watch on the US nonfarm payrolls data due for release this week to gain further indication on the economy’s health.

Brent received an additional boost from supply disruption in the North Sea, where the operator of the Brent pipeline announced that it is still considering whether it would be safe to reopen the oil link, which was closed following a hydrocarbon leak.

Price rises, however, have been restricted by medium-term worries, such as the rising US crude supply and the country’s fiscal crisis.

The American Petroleum Institute released weekly US inventory data, which showed a sharp build of 5.6 million barrels in domestic crude stockpiles for the week to 1 March, including a 259,000-barrel build at the Cushing, Oklahoma.

Traders will also keep a close watch on the weekly stockpile data from the US Energy Information Administration, which is expected on Wednesday, to get further signs on inventories.


Image: Brent is expected to rise to $120 a barrel and US oil to $100 by summer. Photo courtesy of freedigitalphotos / sakhorn38.

Energy