Oil prices moved closer to $71 on Friday as investors brushed off bad U.S. economic news, betting instead that the American economy, the world’s largest crude consumer, will recover later this year.
Oil prices have oscillated near $71 a barrel for about two weeks as investors weigh lacklustre U.S. consumer demand against expectations the economy could rebound strongly next year from recession.
Benchmark crude for September delivery was up 20 cents to $70.72 a barrel by afternoon European electronic trading on the New York Mercantile Exchange. On Thursday, the contract added 36 cents to settle at $70.52.
Prices were also underpinned by good economic news from Germany, France and Japan.
“The positive sentiment ... (is) supported by news that Germany and France posted economic growth in the second quarter (compared to Q1) of this year and a strong morning performance of Japan’s Nikkei index,” Vienna’s JBC Energy noted.
The latest economic data out of the U.S., however, was less upbeat.
The Commerce Department said Thursday that retail sales slipped 0.1 per cent last month, while economists had expected a gain of 0.7 per cent. The Labor Department said initial jobless claims grew more than expected to a seasonally adjusted 5,58,000.
U.S. stock markets managed to rise Thursday despite the weaker retail data, a vote of confidence in the economy that seemed to support crude markets as well.
In other Nymex trading, gasoline and heating oil for September delivery were both up by over a cent to fetch $2.03 and $1.92 a gallon. Natural gas for September delivery rose almost 6 pennies to $3.39 per 1,000 cubic feet.
In London, Brent prices rose 94 cents to $74.42 a barrel on the ICE Futures exchange.
