Oil above $93 as China inflation eases

Alex Kennedy

Associated Press

Oil hovered above $93 a barrel Aug. 9 in Asia as lower inflation in China reinforced expectations for more stimulus measures to boost waning economic growth.

Benchmark crude was up 14 cents to $93.49 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents on Aug. 8 to settle at $93.35 in New York.

In London, Brent crude was down 29 cents at $111.85 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 Aug. 9 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. was scheduled to report weekly initial jobless claims, its June trade balance and wholesale inventories data for June later Aug. 9.

In other Nymex energy trading, wholesale gasoline futures were down 0.7 cent at $2.97 a gallon and heating oil was steady at $3.02. Natural gas was down 3 cents at $2.90 per 1,000 cubic feet.