Oil prices higher on positive US data, Iran concerns

Oil prices edged higher in Asian trade today, supported by upbeat US economic data and fears over supply disruptions in West Asia, analysts said.

New York's main contract, light sweet crude for delivery in April, gained 1% to $107.08 in morning trade and Brent North Sea crude for April delivery was up 34 cents to $123.00.

"Crude oil jumped back to positive territory... As the Federal Reserve said that the US economy expanded modestly in January through mid-February," said Ker Chung Yang, an investment analyst at Phillip Futures.

"Worries that global oil markets might be short of fuel as the United States and Europe impose sanctions on Iran also kept oil futures supported," he said in a market commentary.

The US Commerce Department yesterday said the world's biggest economy grew faster than initially believed in the fourth quarter of 2011 at an annual 3%, even as the Federal Reserve warned of a slower pace this year.

The Commerce Department said the improvement from October to December last year was due in part to positive contributions from consumer spending and private inventory investments.

Geopolitical concerns in West Asia also continue be a strong factor supporting oil prices, analysts said.

A top US air force official yesterday warned that the United States has powerful bombs ready in case of possible military action against crude producer Iran.

His remarks coincided with a visit to Washington by Israeli defence minister Ehud Barak, amid renewed speculation of a potential Israeli strike on Iran's nuclear programme, which the West claims is aimed at building atomic weapons.