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Oil little changed, investors weigh global economy

Source : AP
Last Updated: Fri, Jan 18, 2013 20:30 hrs

The price of oil remained at a four-month high Friday after new data showed China's economy rebounded and a global demand forecast rose.

Benchmark oil for February delivery rose 7 cents to finish at $95.56 per barrel on the New York Mercantile Exchange, the highest since Sept. 17, when crude was above $96 a barrel.

Prices have remained steady at the pump, however, with the average price for a gallon of regular drifting down from $3.31 a week ago to $3.29 on Friday. That's right about where it started the year.

On Friday the global economy took center stage for energy traders. The economy of China, the second largest energy consumer in the world behind the U.S., grew by 7.9 percent in the fourth quarter, up from the previous quarter's 7.4 percent, according to China's National Bureau of Statistics.

The prospect of more oil demand from China helped push up an oil consumption forecast from the International Energy Agency. Global oil demand is expected to rise to 90.8 million barrels a day this year, according to the IEA in Paris, which released its monthly report Friday. That's 930,000 daily barrels more than in 2012 and 240,000 more than the agency's previous forecast released in December.

Lingering concerns about the U.S. economy may be weighing on crude prices Friday, with lawmakers wrangling over spending cuts and the nation's debt ceiling. After a week in which the S&P 500 index repeatedly reached new five-year highs, investors on Wall Street paused. Major indexes were little changed in afternoon trading.

Independent analyst Jim Ritterbusch said the current price for a barrel of oil may be unsustainable.

"The market appears to be sending off signals that some assistance from continued stock market gains and a weakening US dollar will be needed if this advance is to continue."

Natural gas futures rose, however. The price is up about 6 percent in the past week with a chillier forecast pointing to heavier use of the thermostat in many parts of the country.

Energy analyst Addison Armstrong points out that below-normal temperatures are expected in February across the Midwest and Chicago, the nation's largest gas-consuming region.

Natural gas rose 7 cents on Friday to end at $3.57 per 1,000 cubic feet.

Meanwhile, Brent crude, used to price international varieties of oil, rose 79 cents to finish at $111.76 per barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

— Wholesale gasoline rose 3 cents to end at $2.80 a gallon.

— Heating oil rose 3 cents to finish at $3.05 a gallon.

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Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.



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