Brent crude oil looked poised to end the month on a loss as it tread water below $108. The commodity traded at $107.88 at 6:30 GMT on Friday morning as strong US economic data helped mitigate worries about a slowdown in China.
Brent prices were down 2.6 percent for January due in large part to weak Chinese data which has sparked demand concerns. CNBC reported that the second largest oil importing nation's 2013 fuel consumption increased at the slowest pace in over 20 years. In contrast, WTI contracts will likely finish January with little change as a cold spell in the US has ratcheted up demand.
However, global demand growth estimates have been increasing recently despite China's slowdown. An improving US economy is expected to drive consumption higher this year and underpin oil prices.
On the other hand, positive economic indicators in the US have also put pressure on Brent prices as the dollar gains momentum. The dollar rose to a one week high after solid GDP data was released just a day after the US Federal Reserve decided to cut back on its stimulus spending.
Problems in the Middle East also elevated Brent prices this week after suicide bombers took hostages in an Iraqi government building and killed 24 people including themselves.
Moving forward, Europe will be a key driver for oil prices. The region is expected to have a slow and steady recovery this year, which could offset a lack of demand in China and elevate Brent prices.