(Reuters) - Brent crude prices rose above $99 a barrel on Wednesday as supportive economic and crude stocks data from the United States outweighed pressure from Europe's lingering debt crisis.
Brent crude for July delivery rose 26 cents to $99.10 a barrel by 02:48 a.m. EDT (0648 GMT), after losing a cent in the previous session. U.S. crude climbed 47 cents to $84.76.
We probably need to see a more significant rally out of this level to be more confident we have a corrective rally going on, said Ric Spooner, chief market analyst at CMC Markets.
We have gone from pricing in a potential supply shortage because of the situation in Iran ... to a market that is more than adequately supplied.
Oil prices found support from a larger-than-expected drop in U.S. crude stocks. On Tuesday, the industry group American Petroleum Institute reported a 1.765 million barrel drop in domestic inventories last week, more than triple the amount expected by analysts.
Weekly inventory data from the U.S. Energy Information Administration, which typically carries more weight in the market than API estimates, will be released later on Wednesday.
Crude also got a lift from a pick-up in growth in the vast U.S. services sector, a welcome relief after recent disappointing economic data.
Brent has struggled to recover from a near 25 percent drop in oil prices over the last three months, as investors were yet to be convinced that European Union leaders could prevent a breakup of the single currency.
Business surveys indicated that all of the euro zone's major economies were now in various states of decline.
The market will closely monitor Wednesday's meeting of the European Central Bank, widely seen as the only institution capable of immediate action on behalf of the euro zone.
The darkening outlook for the world economy sparked hopes that the United States, the top oil consuming nation, would introduce new stimulus measures to combat the gloom.
However, two top Federal Reserve officials suggested on Tuesday the U.S. central bank was not ready to ease monetary policy at a meeting later this month as the economic outlook had not deteriorated to the point where action was warranted.