Brent Climbs to $100 on Supply Tightening Speculation

 
on April 24 2013 9:02 AM
Brent Crude Oil

Brent crude oil traded above the $100 mark on Wednesday morning on speculation that OPEC would make the necessary adjustments to increase the commodity's price if it remained below $100. Brent traded at $100.85 at 9:10 GMT on Wednesday morning.

After keeping oil output constant at December's meeting, some OPEC members have called for an emergency meeting to tighten up supply. The organization, which supplies more than one third of the world's oil, is set to meet on May 31st for a regularly scheduled meeting.

However, because $100 is the budget breakeven point for several members like Venezuela and Iran, some OPEC countries want to meet earlier to decrease output.

Uncertainty about the global economy has kept a lid on Brent prices, and a recent survey of purchasing managers did little to ease concerns. The Markit Economics report showed that in China, factory growth slowed and demand of exports steadily decreased after a temporary rebound in March. The nation's PMI was at a two month low, however the figure did show growth, albeit very modest.

Eurozone PMI remained unchanged from the last reading, however several factors, including a steep decline in new orders, suggested investors could expect an even worse reading in May. German figures indicated that the bloc's strongest economy was losing steam and could soon join the rest of its struggling peers.

Some investors are hoping to see a lift for Brent on Friday when the US announces its first quarter GDP on Friday. Many are expecting growth near 3 percent, a massive improvement from disappointing figures at the end of 2012.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

 

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