London: Crude oil rose slightly to hold above $109 (Dh400) a barrel on Monday as upbeat business surveys in China and Europe pointed to stronger oil demand while a possible thaw in US-Iran relations underpinned easing supply concerns.
Brent crude for November delivery edged up six cents to $109.28 a barrel by 9.49 GMT, off a low of $108.97 hit earlier in the session. US crude for November rose 24 cents to $104.99 a barrel.
China’s flash HSBC Purchasing Managers’ Index (PMI) hit a six-month high, putting to rest investors’ worries of a sharp slowdown at the world’s second largest economy.
In the eurozone, China’s largest business partner, the Markit Flash Composite PMI showed business activity has grown faster than expected this month as new orders flood in at their fastest pace in over two years.
The US PMI survey will also be released later on Monday.
The robust economic data was nevertheless balanced by bearish sentiment over a possible groundbreaking meeting between the leaders of arch rivals the US and Iran on the sidelines of the UN gathering this week.
Iranian President Hassan Rouhani is expected to pursue a charm offensive in New York this week aimed at setting the right tone for further nuclear talks with world powers which he hopes will bring relief from sanctions, according to diplomats and analysts.
Exports from Iran, one of the largest crude producers, have more than halved in recent years to around one million barrels per day in 2012 due to tightening sanctions.
“We have to watch the Iranian ball. Rouhani’s visit to New York is going to be the key thing to watch because he wants to start the nuclear discussions on new grounds,” said Olivier Jakob, analyst at Petromatrix.
“The process of removing the sanctions is still a little far but at least it pushes back the scenario of an attack on Iran,” Jakob said.
The UN will also discuss this week a plan to disarm Syria of its chemical weapons as fears of unrest in the Middle East subside.
More oil is also coming from South Sudan as it raised output to the highest level since it resumed exports through Sudan following a thaw in their relations.
Brent oil may revisit its April 18 low of $96.75 per barrel over the next three months, Reuters market analyst Wang Tao said.
