Oil rises on expectations for economic stimulus

Oil rises on expectations for economic stimulus

Updated: Saturday, July 28, 2012, 15:27 [IST]

Oil
New York, Jul 27: The price of oil climbed for a fourth day on expectations of more efforts by government officials and central bankers to help the global economy.

China is planning to pump billions of dollars into housing projects and other infrastructure to support its construction industry. The European Central Bank hinted that more support could be in the works for Europe's debt-ridden nations, while the leaders of Germany and France vowed to do everything they can to keep the eurozone intact. There's also the chance the Federal Reserve could roll out new measures to spark a US economy that grew at a tepid annual rate of 1.5 per cent from April through June.

Any new government stimulus could reinvigorate consumers and spark spending and borrowing, which would prop up energy demand. "Markets are buoyed right now by expectations that the ECB or the Fed will announce new stimulus measures," said Gene McGillian, a broker and oil analyst at Tradition Energy.

The ECB and the Federal Reserve both have meetings next week. Benchmark US crude added 74 cents today to finish at USD 90.13 per barrel in New York. It gained USD 2 over the past four days but still had a decline for the week because of a USD 3.30 drop on Monday. Brent crude, which sets the price for oil imported into the US, added USD 1.21 to end at USD 106.47 per barrel in London.

The stimulus hopes outweighed fresh reasons for concern about the US economy. US economic growth came in at just 1.5 per cent for the second quarter. And a measure of consumer sentiment fell in July as people worried about their job prospects.

In other energy futures trading, natural gas prices fell by 9.5 cents to end at USD 3.01 per 1,000 cubic feet. Heating oil added 2.1 cents to finish at USD 2.89 per gallon while wholesale gasoline added 7.4 cents to end the week at USD 2.888 per gallon.

AP

Story first published: Saturday, July 28, 2012, 02:00 [IST]
Topics: oil economy usa europe germany london