Oil Rises First Time in Four Days on Optimism Over U.S. Economic Recovery
Crude rose for the first time in four days amid optimism fuel demand will increase because of improved prospects for an economic recovery in the U.S., the world’s biggest oil-consuming country.
Oil advanced as economists surveyed by Bloomberg News forecast U.S. retail sales probably climbed in July for the first time in three months as incentives spurred auto purchases. The 0.5 percent estimated gain followed a 0.5 percent decline in June. An Energy Department report Aug. 4 showed U.S. crude stockpiles fell 2.8 million barrels to 357.9 million.
“The demand outlook is improving, albeit slowly,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Where we are at the moment at $80 a barrel is probably where we should be, based on fundamentals,” he said.
Crude oil for September delivery rose as much as 25 cents, or 0.3 percent, to $80.95 a barrel in electronic trading on the New York Mercantile Exchange. It was at $80.85 at 9:40 a.m. Sydney time. The contract fell $1.31, or 1.6 percent, to $80.70 on Aug. 6. Futures are 15 percent higher than a year ago.
Oil declined on Aug. 6 after the U.S. Labor Department said private payrolls that exclude government agencies rose by 71,000, less than forecast, after a gain of 31,000 in June that was smaller than previously reported.
“We do have these negative blips on the radar every now and then, and U.S. non-farm payrolls was a pretty significant macro-data release,” National Australia Bank’s Westmore said. “I certainly don’t think that the market balance at the moment justifies a price of $84 to $85.”
Brent crude oil for September settlement rose as much as 33 cents, or 0.4 percent, to $80.49 a barrel on the London-based ICE Futures Europe exchange. It was at $80.30 at 8:17 a.m. Sydney time. The contract dropped $1.45, or 1.8 percent, to end the session at $80.16 on Aug. 6.
