Oil prices rise on U.S. stimulus hopes
Oil prices rose Monday on hopes of more US financial stimulus aimed at boosting the world’s biggest economy, a prospect that was helping to offset disappointing Chinese data, analysts said.
Brent North Sea crude for delivery in October gained 73 cents to $114.98 a barrel in London morning trade.
New York’s main contract, light sweet crude for October, climbed 15 cents to $96.57 a barrel.
“Friday’s unexpectedly poor US labour market data are giving a boost to commodity prices… for this makes it appear almost certain that the US Federal Reserve will announce a further round of quantitative easing (stimulus) at its meeting later this week,” said Commerzbank analysts in a note to clients.
Official data released Friday showed the United States, which is the world’s largest oil consumer, added just 96,000 jobs last month, convincing many that the Fed would agree at its policy meeting Thursday to another round of bond purchases, or quantitative easing, to pump the economy with more fresh cash.
Hopes of fresh stimulus offset data showing Chinese industrial production increasing 8.9 percent year-on-year last month — the lowest figure since May 2009.
China’s economy has seen a marked easing over the past year, expanding 7.6 percent in the second quarter of 2012, the worst performance in three years and the sixth straight quarter of slowing. China is the world’s biggest consumer of energy.
Elsewhere, Saudi oil minister Ali al-Naimi said on Monday that rising oil prices were not justified by market fundamentals, stressing that supply and demand are balanced.
“Saudi Arabia is concerned about rising oil prices in the international oil market. The current high price of oil is simply not supported by market fundamentals,” he said in a statement.
“The market is well balanced, forward cover remains within an acceptable range and inventories are more than adequate,” he added.
Saudi Arabia is the biggest oil producer within the 12-nation Organization of Petroleum Exporting Countries. The Vienna-based cartel accounts for about 40 percent of global crude supplies.