Kuwait crude price up to $103.54 per barrel

22/12/2011 00:00 AST

Price of Kuwaiti crude oil increased by 1.65 US dollars to $103.54 per barrel on Tuesday compared to $101.89 pb on Monday, Kuwait Petroleum Corporation (KPC) said in a statement on Wednesday.

The increase in oil prices yesterday came after the reports of US real estate, which showed an increase in home construction, a positive sign of a developing US economy. The US is the top oil consumer in the world.

In more news, oil prices rose to around $107 a barrel on Wednesday after the European Central Bank's (ECB) first ever offer of three-year loans to banks raised hopes the euro zone would avert a liquidity crisis and head towards economic recovery.

The supply of limit-free and ultra-cheap cash boosted sentiment across financial markets after banks took up a greater-than-expected 489 billion euros.

The ECB's successful tender added to optimism after US housing starts and building permits were shown to have jumped to a 1.5 year high in November.

Brent crude was down 54 US cents to $106.19 a barrel by 1327 GMT after posting the biggest one-day percentage rise since mid-October on Tuesday to settle up by $3.09. US crude fell 38 cents to $96.86 a barrel.

"Cheap funding from the ECB has boosted equity markets," said Michael Hewson, an analyst at CMC markets, adding that gains in stocks had fed through to riskier asset markets.

"But the economic fundamentals don't support the equity rally," he cautioned.

Italy's statistics bureau said the economy had slipped into what is expected to be a prolonged recession, and analysts predicted a steeper fall in the fourth quarter and further contractions thereafter as domestic demand slumps.

Fears of a recession in Europe's third-largest economy weighed against Tuesday's positive German business sentiment for December, underscoring its strength even as growth in neighboring countries collapses.

Italy's disappointing economic data also contrasted with the outlook for Spain, which appeared to brighten after its short-term financing costs more than halved on Tuesday.

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Al Watan