Optimistic reports out of China, the US push crude oil prices above $100

Crude oil prices rose on global commodity markets today, with the American benchmark edging up well over the notoriously resistant $100 per barrel mark, as the dollar plummeted on the currency index on news that China’s GDP increased more than initially expected. The developing nation’s optimistic reports caused renewed hope of steady demand for the fuel, setting crude oil price charts on a firm upward trajectory.

Brent crude oil prices for February settlement gained 24 cents and settled at $111.58 per barrel on the ICE Futures Exchange in London. The European benchmark spent some hours in negative territory at the beginning of the session, as US traders first began making moves on the charts.

West Texas Intermediate crude oil futures for delivery in February gained a considerable $1.44 to settle at $100.14 per barrel in electronic trading on the New York Mercantile Exchange. The contract did not deliver a final settlement price yesterday due to a holiday.

According to the latest financial reports, China’s fourth quarter Gross Domestic Product numbers came in at 8.9%. The positive figure bolstered both the commodities and equity markets, and while the rising market volumes pared down some of the initial gains, the energy sector spent the bulk of the session in firmly positive territory.

Analysts have stated that the impressive gains posted by WTI crude oil prices are merely the contract catching up to its day-long absence from yesterday, and that Brent’s much more modest showings are a more accurate portrait of the state of affairs on the charts. Though China’s numbers are undoubtedly good news, they do little to abate old fears surrounding the debt crisis in Europe.

China’s GDP, while weaker than the several previous quarters, is still well above the projected estimate. The initial concerns were that the debt issues in the euro zone would force the region to cut down on their purchasing of Chinese goods, which would subsequently bring down fuel consumption in the nation. Nonetheless, China’s crude demand rose constantly through the year, and finished December on an all-time high of nearly 10 million barrels per day. The country’s much=expected monetary easing is however still far away.

Outside factors also played a part in the gains the crude oil price charts experienced Tuesday. Germany’s analyst and investor sentiment rose considerably for the month of January, showing an increase of more than 30 points. The sharp bump was primarily credited to the European Central Bank’s recent cash boost, which has left Europe’s banks brimming with funds.

Crude oil prices found more support in the West, where the US has reported a thriving manufacturing sector and optimistic retail numbers.

The weakening dollar also played its part in propelling crude oil up the charts. The greenback sank 0.42% against the standard basket of currencies, as the upbeat mood permeating the sector convinced traders to shift their attention towards riskier commodities. Crude oil prices tend to rise whenever the euro gains against the dollar, as foreign investors flock to the more affordable product.

Tensions and disputes surrounding Iran continued to weigh on the minds of both traders and economists, yet with little concrete action developing in the area at the moment, crude oil continued to receive steady support.

The current president of the European Union, Denmark, has proposed that the bloc support the US’s request for a full embargo on Iranian oil starting from July 1st. The allotted time would then allow for nations to uphold their end in already-existing contracts. Asia’s largest consumers of crude oil are currently in the process of seeking out alternative suppliers for their energy demands.