Oil prices extended their rise in Asia Monday as robust economic data from the United States and China fuelled hopes of a pick-up in demand from the world’s top two economies.
While a sense of calm has returned to Turkey following a failed coup attempt over the weekend, analysts said the situation remains volatile as Turkish authorities press on with a ruthless crackdown against the plotters, detaining 6,000 people.
At about 0350 GMT, US benchmark West Texas Intermediate (WTI) was up seven cents, or 0.15 percent, at USD 46.02 while Brent rose 23 cents, or 0.48 percent, to USD 47.84. Both contracts closed slightly higher on Friday. A set of strong economic numbers from the world’s top economies Friday cheered global markets. The US Commerce Department said retail sales in June rose more than expected, which is good news for an economy driven largely by consumer spending. Earlier in the day China release forecast-beating second-quarter growth figures, providing some relief as the Asian economic giant suffers a long-running slowdown.
Alex Furber, senior client services executive at CMC Markets in Singapore, said prices were higher “on (an) improved demand outlook”. Sanjeev Gupta, an oil and gas analyst with EY, said that while the coup in Turkey has been quashed, it will still “increase the near-term volatility of crude oil prices” as the government crackdown continues. “While Turkey is not a major oil and gas producer, it is home to the key route through which crude oil supplies transit,” he said.
“There are obviously concerns about the situation,” Ric Spooner, a chief market strategist at CMC Markets in Sydney told Bloomberg News. “As it usually does in these circumstances, the market is looking for anything that doesn’t look like a clear and present threat for disruptions.” Over the past month, oil has fluctuated between USD 44 and USD 52 per barrel, after hitting near 13-year lows below $30 in February owing to a global supply glut.