The price of oil slipped to near $ 95 a barrel Friday but remained near four-month highs after new data showed China‘s economy rebounded in the final quarter of last year, suggesting an increase in energy demand.
By early afternoon in Europe, benchmark oil for February delivery was down 26 cents to $ 95.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $ 1.25 to finish at $ 95.49 a barrel. That was the highest close for crude on the Nymex since Sept. 17 and a result of the positive economic reports out of the U.S.
“Investors were prompted to some profit-taking to lock in recent gains, while the markets try to digest the Chinese economic data that slightly improved market sentiment” said a report from Sucden Financial Research in London.
China’s economy grew 7.9 percent in the fourth quarter of 2012, up from the previous quarter’s 7.4 percent. In December, retail sales and factory output growth both accelerated, the National Bureau of Statistics reported.
The figures suggest increased energy demand, a key driver of oil prices. But overshadowing markets were concerns that the U.S. could face a new economic crisis if political leaders fail to resolve discord over spending cuts and the country’s borrowing limit, which needs to be raised to avoid an unprecedented federal default.
Higher expectations for oil demand in China also contributed to an upwardly revised oil consumption forecast from the International Energy Agency.
Global oil demand is expected to rise to 90.8 million barrels a day this year, the Paris-based IEA said in its monthly oil market report released Friday. That’s 930,000 daily barrels more than in 2012 and 240,000 barrels a day higher than the agency’s previous forecast released in December.
The IEA said that economic figures for China had in recent months raised concerns about growth, but that seems to have changed. “Recent data suggest the tide may have begun to turn,” it said in the report.
The IEA described market conditions as tighter than expected, with oil production in Saudi Arabia at the end of 2012 relatively weak. Analysts described that as a call to producing nations to keep supply up.
“This IEA report is basically a message to Saudi Arabia: ‘Please, please, don’t cut further,’” said Olivier Jakob, an analyst with Petromatrix in Switzerland.
Traders were also keeping an eye on the hostage crisis in southern Algeria. Algerian forces launched a raid to free hostages being held by militants at a remote natural gas facility. Casualties were reported. Spanish, Norwegian and British oil companies have evacuated workers from energy facilities in the country, which produces both natural gas and crude oil.
Meanwhile, brent crude, used to price international varieties of oil, fell 46 cents to $ 110.64 per barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline was down 1.36 cent to $ 2.7689 a gallon.
— Natural gas added 1.9 cents to $ 3.513 per 1,000 cubic feet.
— Heating oil lost 1.01 cents at $ 3.0044 a gallon.
___
Pamela Sampson in Bangkok contributed to this report.
Economy News Headlines – Yahoo! News
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