Oil Prices Higher As Demand Improves

Brent crude oil made its way above $107 after positive economic data helped boost the global demand outlook. The commodity traded at $107.56 at 8:05 GMT following positive data from China and reports of a sharp drop in US oil stockpiles.

CNBC reported that US oil inventory data showed that the nation’s crude stockpiles declined by 7.5 million barrels last week, far surpassing the 2.1 million drop that analysts had expected. The drawdown is the US’ largest decline since January and suggested that the nation’s economic growth was translating into increasing energy needs.

Also positive for the demand side of oil was Chinese data out this week which showed that China’s economy expanded by 7.5 percent in the second quarter. The figure, out on Wednesday, was better than expected, though not extremely impressive. In any case, markets were glad to see that the nation was back on track for growth, which has been positive for crude.

Geopolitical tension around the world is also on the radar for crude as conflicts in Iraq, Libya and Ukraine keep markets on edge.

After 11 soldiers were killed in Ukraine on Wednesday due to the ongoing battle between pro-Russian separatists and the government’s forces, Russia will be subjected to another round of sanctions from both the EU and the US. Global leaders called on Moscow to use its influence in order to de-escalate the situation in Ukraine, but the Kremlin has been removed from the conflict thus far. The new sanctions will target companies involved in the unrest, including Rosneft, Russia’s largest oil producer.