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Brent at 5-wk high on positive US data, supply fears

Published 06/10/2011, 12:02 AM
Updated 06/10/2011, 12:04 AM
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* Brent hits $120 a barrel, highest in five weeks

* OPEC not in consensus, positive U.S. data drive oil prices

* China May crude imports up 20.7 pct y/y to 5.07 mln bpd

By Seng Li Peng

SINGAPORE, June 10 (Reuters) - Brent crude rose to $120 a barrel for the first time in five weeks, while U.S. oil climbed above $102 a barrel, on better-than-expected data from top consumer United States and supply worries triggered by OPEC's failure to agree on an output hike.

A softer dollar against a basket of currencies and political tensions in the Gulf also supported oil prices.

ICE Brent for July delivery rose 31 cents to $119.88 a barrel at 0354 GMT, after touching $120.07 earlier -- highest since May 5. U.S. crude was flat at $101.91 a barrel, after hitting a high of $102.15.

"The better-than-expected U.S. trade deficit results boosted not only the U.S. equities but commodities as well," said Singapore-based oil analyst Serene Lim of ANZ Bank. "The positive sentiment continued into Asia's morning trades."

A Commerce Department report showed the U.S. trade deficit narrowed unexpectedly in April as exports hit a new high and imports from Japan tumbled more than 25 percent after its earthquake, tsunami and nuclear disaster.

The trade gap narrowed 6.7 percent from March to $43.7 billion even though oil prices hit their highest level since September 2008. The data suggested stronger second-quarter economic growth than economists had expected.

The Organization of the Petroleum Exporting Countries (OPEC) failing to make a decision on output could continue to buoy prices in the short-haul, Lim said.

"A lack of consensus on the production quota among the OPEC members could lead to a decline in spare capacity," added Lim.

OPEC met on Wednesday and for the first time in about a decade failed to agree on output policy.

Numbers compiled at the OPEC headquarters in Vienna had implied the market needed around 2 million barrels per day (bpd) more oil for the third quarter of this year and 1.5 million bpd for the fourth quarter, OPEC Secretary General Abdullah al-Badri told a World Economic Forum conference.

But he said some of the 12 members of OPEC had different numbers and were unable to agree on any need for more oil, even though oil prices are trading far above $100 a barrel.

Technical charts indicate an end in rebound for both Brent and U.S. oil, according to Reuters market analyst Wang Tao. Brent may end its current rebound at $121 while U.S. crude may end it at $103.

POLITICAL TENSIONS CONTINUE

The political tension in Libya, Syria and Yemen continued to keep support oil prices.

NATO warplanes pummeled a town west of Libya's capital, state media said soon after Western and Arab powers promised more than $1 billion to help rebels fighting to end Muammar Gaddafi's four-decade rule.

U.S. Secretary of State Hillary Clinton said talks were under way with people close to Gaddafi that had raised the "potential" for a transition of power without giving details.

But there was frustration among the rebel leadership despite securing new aid commitments from France, Italy and Turkey.

In Syria, thousands of Syrians fled into Turkey fearing a military assault, officials said, as the country braced for more violent protests against the rule of President Bashar al-Assad.

The latest reports of a government crackdown intensified international concerns over Syria's handling of pro-democracy protests, inspired by uprisings across the Arab world.

Yemen's President Ali Abdullah Saleh, 69, was burned on 40 percent of his body in a rocket or bomb attack at his palace last Friday -- injuries which, depending on the depth of wounds, could be fatal and would probably curb his ability to rule, said U.S. and Yemeni officials.

CHINA DATA

Data on Friday showed China's exports grew 19.4 percent in May from a year earlier, while imports surged 28.4 percent, the customs agency said.

That left the country with a trade surplus of $13.1 billion in May, compared with $11.4 billion in April, squashing earlier concerns of a possible negative data where China's exports growth could moderate in May.

China, the world's second-largest crude buyer, imported 21.55 million tonnes of crude oil in May, compared with 21.54 million tonnes in the previous month.

Crude oil imports rose 20.7 percent from a year earlier to 5.07 million barrels per day in May. (Editing by Himani Sarkar)

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