SINGAPORE- Oil prices turned lower in pre-holiday trading Monday, but retained support from bullish US economic data that have raised hopes of resurgent demand in the world’s top crude consumer, analysts said.
New York’s main contract, West Texas Intermediate for February delivery, was down 10 cents at $99.22 in afternoon trade while Brent North Sea crude for February also eased 10 cents to $111.67.
Desmond Chua, market analyst at CMC Markets in Singapore, said prices were being supported by robust US gross domestic product data last week, which was “way better than expected”.
The US Commerce Department on Friday reported that economic growth accelerated to an annual rate of 4.1 percent in the third quarter, instead of the previously estimated 3.6 percent pace. Analysts had expected the revision to confirm the 3.6 percent number.
The upbeat data followed the Federal Reserve’s announcement that it would cut its stimulus by $10 billion to $75 billion a month from January, indicating it is confident that economic conditions are improving.
Analysts continue to keep a close watch on potential supply disruptions in Africa.
Production in fledgling producer South Sudan has been hit by the escalation of internal strife in the country over the past week, with oil companies flying out their employees after the death of at least five South Sudanese oil workers last Wednesday.
And output in Libya, a member of the OPEC cartel, continues to be curtailed by armed protesters who have refused to lift a months-long blockade of vital terminals in the eastern part of the country.
The protests, as well as blockades of fuel deliveries by the Berber minority, have slashed Libya’s production to about 250,000 barrels per day, from normal levels of nearly 1.5 million.