Brent traded below $118 on Wednesday as Saudi Arabia planned to produce more crude in the second quarter of 2013. The commodity traded steadily at $117.31 at 8:10 GMT on Wednesday morning.
According to CNBC, an oil industry source said that Saudi Arabia plans to fulfill rising Chinese oil demand by increasing its output in the second quarter, but the exact volume of the increase has not been confirmed. An increase on the supply side drove prices down, but is also expected to drive economic recovery within the global market.
At the end of 2012, Saudi Arabian crude output decreased dramatically by 700,000 barrels per day; which reduced the world's supply and propped up prices. Since crude demand is expected to drop in the months to come due to peak refinery maintenance, the news of a supply increase has been bearish.
Recently, the floor under Brent prices has been positive economic data coming from the world's top oil consumers. This week, US economic data is expected to add support to Brent prices as most predict the data will indicate that the nation's economy is stabilizing.
However, gains from US data could be canceled out by poor data from France, which is expected to miss its economic growth target.
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Tension in the Middle East has also lent support to Brent prices after talks between the West and Iran failed to reach a compromise on the nation's disputed nuclear program. Next week, world powers are will continue negotiations, but most say there won't be any real progress until June.
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