The price of oil jumped above $98 a barrel Tuesday amid expectations that crude stockpiles fell for the second week in a row and optimism over economic data from the U.S. and China.
By early afternoon in Europe, benchmark U.S. crude for January delivery was up $1.04 at $98.38 a barrel time in electronic trading on the New York Mercantile Exchange. The contract fell 31 cents to $97.34 on Monday.
China's industrial output rose 10 percent from a year earlier in November, slightly lower than October's increase, while retail sales grew a higher-than-expected 13.7 percent.
The data, coupled with earlier news about stronger U.S. hiring, added to expectations of rising energy demand from the world's top two economies.
Meanwhile, investors are awaiting fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending Dec. 6 is expected to show a draw of 2.8 million barrels in crude oil stocks and a draw of 2.1 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The industry-funded American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
Globally, supplies are expected to remain plentiful over the coming months. The Organization of Petroleum Exporting Countries kept its forecasts for demand for its crude unchanged in its latest monthly report.
OPEC said Tuesday it expects the market to soak up 29.9 million barrels a day of its output this year and 29.6 million barrels a day in 2014.
Both figures are slightly below the daily output target of 30 million barrels a day OPEC stuck to at its general meeting in Vienna last week and could lead the group to a production cut if members like Libya and Iran increase their own output over the coming months.
Libya has been hampered by political instability and disruptions in the oil industry while Iran is looking to escape U.S.-led sanctions after reaching a preliminary deal with leading world powers about its nuclear program.
Elsewhere, Brent crude, a benchmark for international oils, was up 21 cents at $109.60 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline rose 1.44 cents to $2.6893 a gallon.
— Heating oil added 1.97 cents to $3.034 a gallon.
— Natural gas gained 4.6 cents to $4.278 per 1,000 cubic feet.
