Oil rises above $104 per barrel after China data August 9, 2013
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PAMELA SAMPSON, AP Business Writer
BANGKOK (AP) — The price of oil rebounded Friday following a sharp sell-off sparked by expectations the U.S. Federal Reserve will soon start withdrawing its unprecedented monetary stimulus.
Benchmark crude for September delivery was up 74 cents to $104.14 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 97 cents to at $103.40 on Thursday.
Oil fell as low as $102.22 before trimming its losses late Thursday after the U.S. Labor Department said the number of people who applied for unemployment benefits dropped to the lowest level since November 2007. While the news was positive, it drove up speculation that the Fed would start phasing out measures that have kept long-term interest rates at record low levels.
The Fed's policies have sparked investment in riskier assets such as stocks and oil. But comments from Fed officials this week indicate the central bank may be ready to begin reducing its monthly purchases of $85 billion in bonds soon as September.
Positive economic news from China on Thursday and Friday also underpinned the oil price.
The world's No. 2 economy reported Friday that July's producer prices — the price of goods as they leave factories — fell less rapidly than a year earlier, a sign that demand may be improving. The official Xinhua News Agency said retail sales grew 13.2 percent in July from a year earlier, slightly down from June. Industrial production grew 9.7 percent, up from June's 8.9 percent and the highest year-on-year growth in five months.
On Thursday, customs data showed increases in both exports and imports for the month, beating market expectations.
Brent crude, traded on the ICE Futures exchange in London, rose 55 cents to $107.23 a barrel.
In other energy futures trading on Nymex:
— Heating oil rose 0.7 cent to $2.965 a gallon.
— Natural gas rose 1.6 cents to $3.313 per 1,000 cubic feet.
— Wholesale gasoline rose 2 cents to $2.877 a gallon.