Oil futures settled higher Monday on support from firm US equities, geopolitical tensions and an easing of Libyan oil output, but the upside was limited by weak Chinese and eurozone data.
NYMEX April crude settled 62 cents higher at $102.82/barrel. ICE April Brent settled 79 cents higher at $110.64/b, bringing the front-month Brent-WTI spread to $7.82/b.
During the session the Brent-WTI spread narrowed to its lowest level in nearly five months at $7.05/b. That's down from $9.61/b at the start of February.
The Dow Jones Industrial Average was up by 154 points by the NYMEX close, while the S&P 500 Index was about 17 points higher.
Phil Flynn, senior analyst at Price Futures Group, said crude took its cue from stronger equities and also got a bounce from violence in countries like Venezuela, the Ukraine, and South Sudan that have added to uncertainty over world oil supplies.
Venezuela's oil industry, however, is said to be operating normally despite the protests over the last two weeks and left 12 dead and more than 100 injured, mining and petroleum minister Rafael Ramirez said Monday at PDVSA headquarters in Caracas (See story, 1945 GMT).
Another reduction in Libyan oil output, which fell to just 230,000 b/d Monday after protests forced the shut-in of the Sharara field in the west of the country, was also lending upside support to oil futures, said Tim Evans, commodity analyst at Citi Futures Perspective, in a note.
But Evans said the "background macroeconomic news of the day, on the other hand, was mostly bearish, with weak Chinese home prices and weak eurozone inflation pointing to soft demand."
Chinese home prices dropped in January, for the first time in 14 months, according to the National Bureau of Statistics, while eurozone inflation dropped 1.1%, below the European Central Bank target of at or below 2%.
In products, NYMEX March ULSD settled 1.2 cents lower at $3.0872/gal and March RBOB ended 3 points higher at $2.8336/gal.
Evans also said that based on data from the CFTC's Commitments of Traders report released late Friday, managed money's buying of 14,748 contracts of RBOB futures and options in the week ended February 18 confirmed that the fuel was beginning to attract more seasonal attention.
"The bullish case ... has seasonal refinery maintenance limiting supply and a recovery in demand from the recent low level translating into a seasonal downtrend in inventories through the end of April," Evans said.
He noted that the same CFTC report also showed that while there was "plenty of room" for further buying in gasoline, the report also revealed that ULSD and crude futures were "becoming increasingly overbought and vulnerable to a reversal to the downside."
