Oil hovers above $93 on China stimulus hopes
The price of oil hovered above $93 a barrel Thursday as a drop in Chinese inflation reinforced expectations for more economic stimulus measures, which could accentuate demand for crude.
By early afternoon in Europe, benchmark crude was up 22 cents to $93.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents on Wednesday to settle at $93.35 in New York.
In London, Brent crude was up 24 cents at $112.38 on the ICE Futures exchange.
Crude has surged from below $78 in late June amid hopes that policymakers in the U.S., Europe and China will soon implement monetary and fiscal stimulus measures to help reverse slowing economic growth.
Lower than expected non-OPEC crude production and recent pipeline and refinery accidents have also helped push prices higher.
China on Thursday said its inflation rate fell further in July, giving the government more room to stimulate growth amid mixed signals about whether the world's second-largest economy is recovering from a painful slowdown.
Analysts are also closely watching political upheaval in Syria. While Syria is not a major crude producer, its chaotic civil war could undermine stability in its neighbors, which include oil heavyweights Saudi Arabia, Iran, Iraq and Kuwait.
"Oil markets remain choppy, but the strong six-week uptrend remains in place," Barclays energy analyst Paul Horsnell said. "Syria represents a severely complicating factor for Middle East geopolitical issues, with a high potential for spillovers and intensification of other issues."
The U.S. is scheduled to report weekly initial jobless claims, its June trade balance and wholesale inventories data for June later Thursday.
In other Nymex energy trading, wholesale gasoline futures were up 0.55 cent at $2.9859 a gallon and heating oil was up 0.75 cent at $3.0234. Natural gas was down 2.1 cents at $2.912 per 1,000 cubic feet.
Alex Kennedy in Singapore contributed to this report.