Brent oil looks bullish again but economic worries may squeeze gains

European Brent oil has added around $4.00 a barrel in the last week and may well continue on an upward path with technical resistance at around $118, however economic worries in Europe and the US are still playing a part in keeping a lid on much higher oil prices for now.

Latest Brent Oil Price

In London, ICE Brent oil futures for March 2013 delivery closed Friday’s session at $116.59 a barrel on the ICE Futures Exchange, up from around $113 at the start of the week. The current price of Brent is at a three month high with most of the gains added in the last few days.

Oil Demand and Prices

Oil prices are rising again as speculators factor in the possibilities of a boost in demand from the US and Europe with better than expected European data adding some optimism over the global economy. EU sentiment improved more than expected across all sectors in January, rising for the third month in a row in a sign that the region’s economy could be emerging from a low point in the fourth quarter of 2012.

On Thursday however, oil pared gains on release of surprisingly weak US growth figures and disappointing economic data from China.

Middle East Supply Concerns

Brent oil prices have spent the last 6 months hanging around $110 a barrel while the West attempts to kickstart sluggish economies. But I feel the main driver of high oil prices comes back down to the same old story of supply concerns from the Middle East.

On Thursday, Syria protested to the UN over an Israeli air strike on its territory and warned of a possible “surprise” response. Meanwhile, Iran’s uranium enrichment plans look set to slip into a higher gear. Iran wants to upgrade its main enrichment plant at Natanz. The upgrade could speed up enrichment by as much as two or three times, something that worries the West.

Currently, international negotiations surrounding Iran’s nuclear program are stalemated by disagreement over the venue and date for the next encounter between Iranian negotiators and outside powers.

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This article was written by: JR @ liveoilprices.co.uk

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Brent oil looks bullish again but economic worries may squeeze gains