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Oil above USD114 on German Ifo

Friday, February 22 12:40:38

Oil rose today as evidence of improving business morale in Germany helped bolster sentiment after two days of heavy losses.

German business morale jumped at its fastest pace in over two years in February, the Munich-based Ifo think tank said, pointing to a solid recovery in Europe's largest economy after a dismal end to 2012.

Brent fell nearly 2 percent on Thursday, its steepest drop since November, during a two-day sell-off fuelled by worries that the U.S. Federal Reserve could wind down its bond buying programme earlier than expected and that Saudi Arabia could raise its oil output.

Weak data in the U.S. and Europe also added to concerns that the rally that began at the start of the year was overdone.

"The price drop was fundamentally not justified and we will see higher prices soon ... in the upcoming weeks," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

Brent crude for April rose $1.26 per barrel to a high of $114.79 before easing back to around $114.20 by 1150 GMT. U.S. crude was at $93.07, up 23 cents, after hitting a six-week low in the previous session.