Oil prices climb before US inventory data

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Oil prices jumped on Wednesday after two days of losses caused by lingering concerns over waning US demand as the market awaited energy stockpiles data from the United States.

Brent North Sea crude for delivery in July gained $1.09 to $111.08 a barrel in midday London deals.

New York's main contract, light sweet crude for June, advanced $1.18 to $98.09.

Analysts expect the US data Wednesday to show an increase in crude oil inventories, which would reinforce evidence of weak energy demand in the United States, the world's biggest oil-consuming nation.

US data Tuesday showed a plunge in home construction in April, triggering concerns about the overall health of the world's largest economy.

Housing starts tumbled 10.6 percent from March and building permits, a forward-looking indicator, fell 4.0 percent, the Commerce Department said.

Apart from the United States, there are also growing concerns over the eurozone economies and China, analysts said.

"Confidence out of the US, the EU and China is slowing down," said Jonathan Barratt, managing director with Sydney-based Commodity Broking Services.

"I would like to think oil prices will remain soft," he told AFP.

© 2011 AFP

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