Oil Rises Above $101 On Positive China, US Data

By Salon Staff

Published January 18, 2012 8:27AM (EST)

KUALA LUMPUR, Malaysia (AP) — Oil advanced above $101 a barrel Wednesday in Asia, buoyed by positive economic data from the world's top two crude consumers, China and the U.S.

Benchmark crude for February delivery was up 57 cents at $101.28 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract jumped $2.01 to finish at $100.71 on Tuesday.

China, the world's second largest economy, reported 8.9 percent growth in the fourth quarter, slower than the previous quarter but robust enough to indicate it would avoid an abrupt slowdown. Retail and factory production improved while oil demand was up 6.4 percent in 2011 from 2010, according to data cited by Barclays Capital.

In the U.S., government data showed manufacturing in New York expanded at the fastest pace in nine months.

"The positive economic news out of China and the U.S. have increased optimism about global economic conditions and helped ease concern of a slowdown in oil demand," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Tension between Iran and Saudi Arabia, as well as a move by France to accelerate the EU's implementation of an embargo on Iranian oil export also supported prices, he said.

Saudi Oil Minister Ali al-Naimi has said Saudi Arabia wants to stabilize prices at $100 a barrel this year and was ready to pump more oil if needed. That came as Iran warned Gulf nations not to make up any shortfall and that it may shut the Strait of Hormuz which is used to transport about a fifth of the world's oil.

In other energy trading, heating oil rose 0.8 cent to $3.05 per gallon and gasoline futures rose 1.4 cents to $2.79 per gallon. Natural gas fell 0.8 cent to $2.48 per 1,000 cubic feet.

Salon Staff

MORE FROM Salon Staff

Related Topics ------------------------------------------