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Monday, Jul 9, 2012 8:15 AM UTC

Oil rises slightly to near $85 on stimulus hopes

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Topics: From the Wires,

SINGAPORE (AP) — Oil rose slightly to near $85 a barrel Monday, clawing back some of a large drop from the previous session amid hope that weak U.S. economic growth may trigger new stimulus measures.

The Labor Department on Friday said the U.S. economy added 80,000 jobs last month, which was fewer than expected and prompted speculation that the U.S. Federal Reserve may implement more monetary stimulus measures known as quantitative easing.

Last week, the European Central Bank and the People’s Bank of China both cut lending rates in the bid to boost flagging economic growth.

“We’re still stuck in this mode of slow growth, which means weak demand,” energy trader and consultant Carl Larry of Oil Outlooks and Opinions said. “We have seen the ECB and China both take aggressive measures to ensure economic recovery and stimulate growth. We will need the U.S. Fed to do something similar.”

Benchmark oil for August delivery was up 41 cents at $84.86 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell $2.77 to settle at $84.45 on Friday in New York.

In London, Brent crude for August delivery was up 86 cents to 98.95 per barrel on the ICE Futures exchange.

China said Monday that its annual inflation rate fell to 2.2 percent, the lowest since January 2010. Analysts said slowing inflation should give policymakers more room to implement stimulus and boost demand in the world’s second-largest crude consumer.

In other energy trading, heating oil was up 2.3 cents at $2.73 per gallon and gasoline futures gained 1.5 cents to $2.73 per gallon. Natural gas gained 4.3 cents to $2.82 per 1,000 cubic feet.

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