Brent crude oil gained momentum on Wednesday as growth in industrialized countries became more likely. The commodity traded at $107.10 at 6:30 GMT on Wednesday morning.
According to CNBC, the International Energy Agency reported that economic growth will likely cause oil consumption to increase in the coming year. Also on Tuesday, the International Monetary Fund was positive about global economic growth. The IMF raised its growth forecast for the first time in almost two years, citing improvement in advanced nations.
Following the news, Brent rose to a two week high of $108.00, but settled nearer to $107 on Wednesday. A better picture of demand has helped to mitigate some of the commodity's losses due to increasing supply.
After reaching a landmark deal last year on Iran's nuclear program, world powers and Iranian officials are taking steps to follow through on their commitments under their agreement. Tehran has begun to halt its nuclear development processes and in turn Western leaders will begin to lift the sanctions against Iran. Most expect that Iran will return to its full export capacity, around 4 million barrels per day, within six months of the sanctions being lifted.
The ongoing crisis in Syria also contributed to the floor beneath oil prices. Fighting in the nation has been threatening to spill over the Syrian border and ignite a larger problem in the oil rich Middle East.
Moving forward, investors will be looking to the US for the latest inventory data to get a better picture of the number one oil consuming nation's demand appetite. Most are expecting the report to show that commercial crude inventories increased last week for the first time in nearly two months. Due to Monday's holiday, the API report is due out on Wednesday and the EIA's data will be released on Thursday.
by Laura Brodbeck