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Oil rises to near $87 in Asia as economic growth in China slows in line with analyst forecasts
SINGAPORE (AP) ¯¯¯ Oil rose to near $87 a barrel Friday as economic growth in China, the world's second-largest crude consumer, slowed in the second quarter to a three-year low but in line with analyst estimates.
China said its gross domestic product expanded 7.6 percent in the April to June period from a year earlier, the lowest since 2009. China also reported that retail sales and factory output growth slowed in June.
Crude has fallen from $106 in May amid signs of slowing economic growth in the U.S., Europe and China. Some analysts expect global policymakers to continue to cut lending rates and boost fiscal spending, which should spur economic growth and oil demand.
"The likelihood of some stimulus measures keep the upside risk of the oil market tilted higher through month's end and possibly beyond," energy trader and consultant Ritterbusch and Associates said in a report.
Benchmark oil for August delivery was up 43 cents at $86.51 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose 27 cents to settle at $86.08 on Thursday in New York.
In London, Brent crude for August delivery was up 59 cents at $101.66 per barrel on the ICE Futures exchange.
Fresh U.S. sanctions against Iran aimed at stifling its nuclear program helped support oil prices. The new sanctions announced Thursday were aimed at companies and people affiliated with Iran's defense ministry. Previous sanctions were meant to curtail its ability to export oil.
Earlier this year, European refineries stopped buying Iranian oil, and Iran's banks were blocked from doing business with much of the world.
The U.S. and other Western nations say Iran is building a nuclear weapon, which Iran denies. Its leaders have threatened to block a key shipping channel out of the Persian Gulf if the sanctions continue, a move that could slow down or even halt shipments of about 20 percent of global oil supply.
In other energy trading, heating oil was up 0.5 cent at $2.78 per gallon and gasoline futures rose 0.5 cent to $2.67 a gallon. Natural gas gained 1 cent to $2.88 per 1,000 cubic feet.