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Brent at 5-week high on US data, supply fears

London, June 10, 2011

Brent crude rose to $120 a barrel for the first time in five weeks, while US oil climbed above $102 a barrel, on better-than-expected data from top consumer US 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. US crude was flat at $101.91 a barrel, after hitting a high of $102.15.

'The better-than-expected US trade deficit results boosted not only the US 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 US trade deficit narrowed unexpectedly in April as exports hit a new high and imports from Japan tumbled more than 25 per cent after its earthquake, tsunami and nuclear disaster.

The trade gap narrowed 6.7 per cent 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.-Reuters




Tags: Brent | US data |

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