Oil prices edge up amid US data, China worries
The price of oil edged slightly higher on Friday but remained under $100 a barrel as traders weighed whether an apparent pickup in the U.S. economy could spur enough demand to offset a slowdown in China.
By early afternoon in Europe, benchmark U.S. crude for April delivery was up 44 cents to $98.64 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, the Nymex contract rose 21 cents to close at $98.20.
Brent crude, used to set prices for international varieties of crude, was up 22 cents to $107.14 on the ICE Futures exchange in London.
Global markets, from stocks to commodities, have been roiled this week by signs of weakness in the Chinese economy and tensions in Ukraine.
China is one of the top consumers of energy, so an economic slowdown there could dial back demand for oil. At the same time, Russia is one of the top producers of oil worldwide, meaning that any Western sanctions against Moscow for its military incursion into the Ukraine's Crimean Peninsula could affect global supplies.
Still, recent good news about the U.S. economy helped underpin prices on Friday. American retail sales bounced back in February after suffering a steep decline during a bitterly cold January. Shoppers spent more on autos, clothing and furniture. And the number of people seeking U.S. unemployment benefits dropped to the lowest level in three months.
Oil prices also benefited from the latest forecast from the International Energy Agency, which raised its estimate for global oil demand in 2014 to 92.7 million barrels a day, 95,000 barrels a day more than its projection made last month.
"Growth momentum is expected to benefit from a more robust global economic backdrop," the Paris-based IEA said in its latest monthly oil market report. "The pace of growth will likely build through the year, as underlying macroeconomic conditions improve, but the standoff in Ukraine has increased downside risk to the forecast."
While demand in the U.S. was expected to continue to strengthen, the IEA agreed with views that China's oil demand would continue to decline, "as the government attempts to redirect the economy from heavy reliance on exports to domestic consumption, and, at the margin, environmental measures designed to curb air pollution."
In other energy futures trading on Nymex:
- Wholesale gasoline shed 0.05 cent to $2.9324 a gallon.
- Heating oil was up 0.8 cent to $2.9121 a gallon.
- Natural gas added 0.4 cent to $4.387 per 1,000 cubic feet.