After finishing the week above $119, Brent crude oil has continued to trade steadily on Monday morning. The commodity traded at $118.48 at 9:00 GMT on Monday morning, as confidence in an improving global economy remained strong.
Although tension in the Middle East continued to keep a floor under prices, it seems that Brent's rally is driven mainly by increasing demand.
Lower trading volumes are expected this week due to the Chinese New Year, but Brent has traded evenly near last week's highs. Chinese data showed that the energy consuming giant's exports and imports shattered predictions and supported speculation that China's economy was rebounding. Chinese crude oil imports increased dramatically, posting the third highest daily rate to date.
At the moment, positive data from China is overshadowing doubts in the eurozone over political uncertainty. Both Italy and Spain have made news recently as politics in both countries make investors nervous about the fragile state of both economies. However, as a scandal unfolds in Spain and Italian elections approach, the region's political problems could begin to weigh on demand optimism.
The market has also responded to severe winter weather in the US as a blizzard caused wide spread power outages and blanketed the northeast in nearly 40 inches of snow. The storm has kept many confined to their homes, and travel to and from the region has ground to a halt.
From the demand side, tension between the West and Iran over the nation's nuclear development program has long pressured the commodity. However, according to Reuters, Iran has been converting enriched uranium into reactor fuel. This development has been received positively, as some claim it will buy time for negotiations.
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