World oil prices climbed today on supply concerns over crude producers Iran and Sudan, and upbeat manufacturing data from top global energy consumer China.
The market found further support in hopes for a positive outcome to ongoing Greek debt talks and better than expected manufacturing figures in the euro zone.
New York's main contract, West Texas Intermediate crude for delivery in March, gained 11 cents to $98.59 a barrel. Brent North Sea crude for March delivery advanced $1.23 to $112.21 a barrel in London.
Talks between Iranian officials and a delegation from the UN atomic watchdog wrapped up late last night with no sign of any breakthrough over Tehran's nuclear programme, media reported.
The US and the European Union have been piling severe economic sanctions on Iran in the past three months to pressure it to halt its nuclear activities, which they claim is aimed at building an atomic bomb.
On the back of an embargo on Iranian oil by the EU last week, US lawmakers yesterday unveiled proposals for fresh sanctions on Tehran. Iran, which maintains that its nuclear programme is for peaceful purposes, has threatened to retaliate, possibly by closing the strategic Strait of Hormuz at the entrance to the Gulf.
The chief UN nuclear inspector returned from a visit to Tehran saying there was still "a lot of work" to do, with Iran's foreign minister insisting that the team did not visit any atomic sites.
Traders are also closely watching the situation in South Sudan, which has nearly completed a drastic shutdown of its oil production - the fledging nation's top revenue resource - over a revenue sharing dispute with Sudan. South Sudan has accused Khartoum of stealing $815m of its crude.
UN chief Ban Ki-moon said earlier this week that tensions between the two countries and the oil row had become a major threat to regional peace and security.
South Sudan seceded peacefully from Sudan last July after decades of war but both countries have since repeatedly exchanged allegations that each backs proxy rebel forces against the other.
Aside from supply worries, oil prices also rose today after official data showed that Chinese manufacturing activity improved in January despite weaker demand for exports. The official purchasing managers index (PMI) rose to 50.5 in January from 50.3 in December, the China Federation of Logistics and Purchasing said.
Manufacturing expanded for the second month in a row, after contracting for the first time in 33 months in November, when the PMI stood at 49. A reading above 50 indicates the sector is expanding while a reading below 50 suggests a contraction.
The data raised hopes that the world's second-largest economy is heading for a soft landing.
