Brent crude oil held above $112 on Wednesday morning as data supporting hopes that the global economy was picking up continued to buoy the markets. The commodity traded at $112.26 on Wednesday morning.
Good news from Japan on Tuesday was largely responsible for the commodity's rise on Tuesday, as many are hoping the world's third largest economy will recover swiftly. The Bank of Japan said it would commit to ending deflation by purchasing assets, and announced a 2% inflation target on Tuesday. This aggressive move to improve the Japanese economy was greeted in by investors with optimism, and created a rally for Brent prices.
However, on Wednesday, doubts began to creep in after analysts started to pick apart the program. According to the Wall Street Journal, the Japanese asset buying plan is little more than an empty promise in 2013; as the plan to ease the economy wouldn't kick in until 2014, leaving the current economic situation little changed.
Mixed feelings about the Japanese news did not overshadow gains from positive data out of the two largest oil consumers, the U.S. and China, earlier in the month. The two economic giants have made a slow but steady recovery, and as their economies pick up, so does confidence that oil demand will match that of supply in 2013.
In the coming weeks, investors will have their eyes on the U.S., where the political gridlock over the region's debt ceiling appears to be easing. After an 11th hour decision regarding the nation's fiscal cliff on New Year's Eve, many worried that the debt ceiling decision would play out much the same.
However, the U.S. media is reporting that both sides seem to be in agreement about extending the deadline by three months. A deadline extension would relieve tension between the two sides and calm uncertainty surrounding the issue in the markets.
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