Oil prices increased again today, thanks to a positive outlook for the Chinese economy; however, growing concerns about the adverse effects of a possible fiscal crisis in the US restricted a price rally.
Brent crude rose by 59 cents to $108.50 a barrel, while US crude went up by 84 cents to $86.73, reported Reuters.
China’s huge manufacturing sector gained momentum in December 2012, and raised hopes for the country’s economic revival that could also give an impetus to fuel demand.
Oil prices also received some support from the US, where employment generation has picked up significantly and retail sales data released showed a positive outlook.
It is, however, expected that the oil price gains will continue to be capped until US lawmakers find a solution to avert the country from the looming fiscal cliff.
On Thursday, secretary general of the Organization of the Petroleum Exporting Countries (OPEC) said that the group is relaxed about rising inventories in the first half of 2013, unless oil prices evade extreme moves from the current acceptable level.
Commenting on OPEC’s recent decision to stick to 30 million barrels per day (bpd) output target, analysts said the group may consider a reduction in output sometime next year in the wake of forecasts for a lower demand.
Meanwhile, Iraq has said it "will never cut production", adding that other OPEC producers should shoulder the burden of cuts if a reduction in supply is required.
Image: China’s manufacturing sector gained momentum, raising hopes for the country’s economic revival. Photo courtesy of Ecow.
