Brent crude oil held steadily above $112 on Thursday morning after positive Chinese data kept optimism in the markets. The commodity traded at $112.79 on Thursday.
China, the world's second largest oil consumer, buoyed hopes that global demand for oil would increase as it released better than expected manufacturing data. Growth in China's enormous factory sector, which was at its highest in two years, implies higher fuel demand in the months to come. The data also supports forecasts that the nation's economy is on the mend.
According the CNBC, analysts believe that second quarter GDP growth in China will outpace the first. Some are forecasting Chinese oil demand to grow by as much as seven percent to 11.3 million barrels per day in 2013.
The Chinese data coupled with a temporary solution for the U.S.' debt ceiling plan added to investors' confidence that the global economy would improve in 2013. As the date of the US debt ceiling approached, a plan to extend the deadline and allow the government to keep borrowing until mid-May was passed in order to give politicians more time to hash out a plan.
If the fiscal cliff was any indication of Democrats' and Republicans' ability to compromise, many are worried that the debt ceiling will result in yet another political gridlock.
After an unexpected cut in the Seaway oil pipeline, WTI crude prices fell but Brent traded in the opposite direction. The newly expanded pipeline cut its oil pump rate to 175,000 barrels per day, less than half of its usual flow.
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