It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
Brent crude for October, which expires today, was up $2.12 cents at $114.52 by 1012 GMT. The November contract was up $2.15 cents at $111.80. US crude was up 30 cents to $89.21 a barrel.
Volatility in Brent has been accentuated by the imminent expiry of the October contract, with the liquidity all in the November contract, but analysts and traders have expressed surprise that oil has rallied so strongly given recent bearish newsflow.
“With the euro debt crisis back on centre stage, one thing is sure to follow: volatility,” said Thorbjorn Bak Jensen, oil analyst at Global Risk Management.
Noting Brent’s $2 per barrel move in less than a minute, Olivier Jakob, oil analyst at Petromatrix, linked it to technical factors, after the November contract moved back above its 200-day moving average of $110.20 a barrel.
“It’s possible that people are covering shorts,” added Simon Wardell, an analyst at IHS Global Insight. “But I’m surprised at the reaction of the markets - everything seems to be up.”
The oil market is taking some support from European stocks , which rose on Thursday on signs that European policymakers are taking tentative steps to tackle the crippling debt crisis.
A weaker dollar is also supporting, with the US currency down 0.32 percent against a basket of currencies by 1007 GMT. A weaker dollar makes oil cheaper for those using other currencies.
But analysts said the upside in crude would be fairly limited until the Eurozone crisis plays out.
World Bank President Robert Zoellick said on Wednesday the world had entered a new economic danger zone and Europe, Japan and the United States all needed to make hard decisions to avoid dragging down the global economy.
“The market at some point will have to come to the conclusion that the growth prospects which have been priced in to Brent are unrealistic,” said Eugen Weinberg, an analyst at Commerzbank. “The US Federal Reserve meeting next week is unlikely to bring a new round of quantitative easing in the form of direct Treasury purchases.”
Europe’s finance ministers have been warned confidentially of the danger of a renewed credit crunch as a “systemic” crisis in euro zone sovereign debt spills over to banks.
Swiss bank UBS was under pressure after it said a rogue trader had lost it $2 billion in unauthorised dealing and police in London arrested a man in connection with the case.
Oil traders are looking to a bundle of data coming from the United States later today, including August consumer prices, the Philadelphia Fed and Empire Manufacturing surveys, and the regular weekly jobless claims.
Weinberg said that the Philly Fed had been a massive underperformer recently and this had been taken by many as a sign of an upcoming recession in the US
“There is some tension in the market to look at that. The retail sales data that came yesterday also failed to surprise on the upside. It was rather disappointing,” he said.
Reflecting slowing growth, US total oil product demand over the past four weeks fell 0.9 percent from a year earlier, while gasoline use over the summer declined to an eight-year low, the Energy Information Administration said on Wednesday.
Traders paid little attention to the biggest weekly drop in crude stockpiles this year, a 6.7-million-barrel decline, which came on the back of disruptions caused by Tropical Storm Lee. That left inventories at their lowest level since February.
Libya will begin exporting crude oil from the eastern port of Tobruk within 10 days and could be producing 1 million barrels per day (bpd) within six months, the chairman of the National Oil Corporation (NOC) said.
It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
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