Oil stays near 4-month high on China growth data, stronger demand forecast

NEW YORK, N.Y. – The price of oil remained at a four-month high Friday after new data showed China’s economy rebounded and the forecast for global demand rose.

Benchmark West Texas Intermediate crude for February delivery rose seven cents to finish at US$95.56 a barrel on the New York Mercantile Exchange, the highest since Sept. 17, when crude was above $96 a barrel.

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

On Friday, the global economy took centre stage for energy traders. The economy of China, the second largest energy consumer in the world behind the United States, grew by 7.9 per cent in the fourth quarter, up from the previous quarter’s 7.4 per cent, 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 was 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 U.S. debt ceiling.

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 six per cent in the past week with a chillier forecast pointing to heavier use of the thermostat in many parts of the United States.

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

In other energy futures trading on the Nymex, wholesale gasoline rose three cents to end at US$2.80 a U.S. gallon (3.79 litres) and heating oil rose three cents to finish at US$3.05 a gallon.