Oil rises on expectations for economic stimulus

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Associated Press

Posted on July 27, 2012 at 4:00 PM

Updated Friday, Jul 27 at 4:00 PM

NEW YORK (AP) — The price of oil climbed for a fourth day on expectations of more efforts by government officials and central bankers to help the global economy.

China is planning to pump billions of dollars into housing projects and other infrastructure to support its construction industry. The European Central Bank hinted that more support could be in the works for Europe's debt-ridden nations, while the leaders of Germany and France vowed to do everything they can to keep the eurozone intact.

There's also the chance the Federal Reserve could roll out new measures to spark a U.S. economy that grew at a tepid annual rate of 1.5 percent from April through June.

Any new government stimulus could reinvigorate consumers and spark spending and borrowing, which would prop up energy demand.

"Markets are buoyed right now by expectations that the ECB or the Fed will announce new stimulus measures," said Gene McGillian, a broker and oil analyst at Tradition Energy. The ECB and the Federal Reserve both have meetings next week.

Benchmark U.S. crude added 74 cents on Friday to finish at $90.13 per barrel in New York. It gained $2 over the past four days, but still had a decline for the week because of a $3.30 drop on Monday.

Brent crude, which sets the price for oil imported into the U.S., added $1.21 to end at $106.47 per barrel in London.

The stimulus hopes outweighed fresh reasons for concern about the U.S. economy. U.S. economic growth came in at just 1.5 percent for the second quarter. And a measure of consumer sentiment fell in July as people worried about their job prospects.

Meanwhile, retail gasoline prices were flat at $3.488 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped by 44.8 cents since prices peaked this year in April.

In other futures trading, natural gas prices fell by 9.5 cents to end at $3.01 per 1,000 cubic feet. Heating oil added 2.1 cents to finish at $2.89 per gallon while wholesale gasoline added 7.4 cents to end the week at $2.888 per gallon.

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Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP

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