SINGAPORE- Oil prices extended their gains in Asia Tuesday as investors cheered robust economic data from US, China and Japan, with the breakdown of initial Ukraine-Russia talks to avert a gas cut-off also boosting prices.
US benchmark West Texas Intermediate (WTI) for July gained 26 cents to $104.67 a barrel by midday after jumping $1.75 in New York on Monday.
Brent North Sea crude was up 16 cents to $110.15 for its July contract after leaping $1.38 in London trade.
Singapore’s United Overseas Bank said crude oil prices were “buoyed by expectations of stronger demand after the robust economic data from US, China and Japan — the world’s three largest oil consumers”.
China on Sunday said its trade surplus surged 75 percent in May from a year ago as exports surged.
The bullish data came on the back of a positive US jobs report Friday that showed that the world’s biggest oil consumer can still muster solid growth despite the weakness in Europe and other regions.
On Monday, Japan also revised upward its economic growth for the first quarter to the fastest pace in more than two years, at an annual rate of 6.7 percent.
Investors were also tracking developments in Ukraine after early negotiations with Russia to avert a cut-off in gas supplies broke up early Tuesday without a deal.
The EU-brokered gas talks in Brussels are set to resume later Tuesday or Wednesday.
“The talks represent a potential source of friction and with concerns of armed conflict, it is a possibility for an upside bias on crude oil,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.
The talks come as a Russian deadline approaches Wednesday for Ukraine to cover a debt for supplies of nearly $4.4 billion (3.2 billion euros) or have its shipments cut off.
About 15 percent of Europe’s gas from Russia transits through Ukraine — a dependence that EU nations have been trying to limit.
Analysts said the fuel freeze would also deal a bruising blow to a Ukrainian economy that the International Monetary Fund already expects to contract by five percent this year.
Ukraine has refused to pay the bills in protest at Russia’s decision to nearly double rates in the wake of the February ouster of Kiev’s Kremlin-backed president.