Crude rises as Chinese growth figures meet expectations
Published Jul 13, 2012 12:06PM ET
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD86.85 a barrel on Thursday, up 0.89%, off from a session high of USD85.63 and up from an earlier session low of USD87.33.
China's 7.6% GDP growth met expectations, which sparked relief buying of crude even though the figure fell below the first quarter's expansion rate of 8.1%.
A cooling Chinese economy would need less fuels and energy to grow.
Oil also saw support from weak U.S. consumer sentiment figures.
In the U.S., the Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment fell to 72.0 in July from 73.2 in June.
Analysts were expecting a 73.4 reading.
The numbers fueled sentiments that the Federal Reserve will stimulate the economy later this year via bond buybacks from banks, a monetary policy tool known as quantitative easing that weakens the dollar to spur the economy.
Oil often rises when the Fed weakens the greenback to jolt the economy since the commodity trades on dollar-denominated exchanges, making it attractively priced in the eyes of investors with other currencies.
While China's growth figures met expectations, they still depict an economy that may be cooling, which sparked talk Beijing will take steps to stimulate its economy, which further sent crude gaining.
On the ICE Futures Exchange, Brent oil futures for August delivery were up 1.28% and trading at USD102.36 a barrel, up USD15.51 from its U.S. counterpart.
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Written By: Investing.com
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