Brent crude oil neared a one week high late on Tuesday, but slipped back on Wednesday morning as investors began to worry that the US Federal reserve would cut back on its quantitative easing.
The commodity traded at $104.08 at 9:38 GMT on Wednesday morning as it settled between demand woes and supply interruption worries.
Reuters reported that data on Tuesday showed that US home prices grew in March at their fastest rate in almost seven years. Consumer confidence data also revealed that the nation was on track for a resilient recovery.
Many are expecting the US to pull the global economy out of its current slump and Tuesday's data helped confirm that the number one oil consumer was on the road to recovery.
The US data reignited worries that the US Federal Reserve will start scaling back its $85 billion per month stimulus plan in response to the improving economy.
Gains from the US data were capped by news that the International Monetary Fund cut its growth forecast for China from 8 percent to 7.75 percent. The drop was attributed to the weakened global economy and lack of exports.
Brent prices are also finding support from the escalating Syrian civil war, which is threatening to spill over the nation's borders and disrupt supply in the oil rich Middle East. A European arms ban was lifted on Monday, allowing the region send weapons to Syria.
Although many were expecting Britain and France to begin sending weapons to Syrian rebels later this year, the two nations announced on Tuesday that they did not need to wait until August 1st to begin arming the rebel forces.
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