Oil prices end week higher

AAP

Oil prices have advanced, building on the week's gains triggered by positive global economic data that boosts the outlook for crude demand.

New York's main contract, West Texas Intermediate (WTI) for delivery in August, rose 53 cents to $US108.57 a barrel - a fresh 16-month high point.

Brent North Sea crude for September meanwhile gained 34 cents to stand at $US109.04 a barrel in London midday trade.

WTI had jumped by $1.56 in value on Thursday to end at the highest level since March 1, 2012.

The big jump in New York crude accompanied similar gains for share prices on Wall Street after a sharper-than-expected drop in US jobless claims and an unexpected spike in regional manufacturing activity.

Markets have been supported also by this week's assurances from Federal Reserve chief Ben Bernanke that the bank's $85 billion-a-month bond-buying scheme would be kept in place as long as the world's biggest economy needed it.

"Better-than-expected US economic data are providing the WTI price with upward momentum and so is the sharp reduction of US crude oil stocks in past weeks," said Commerzbank analyst Carsten Fritsch.

The official crude inventories report by the US Department of Energy on Wednesday showed supplies in the United States fell by 6.9 million barrels in the week to July 12.

The drop, which comes during the summer driving season when Americans take to the roads for their holidays, beat the 2.2 million barrels estimated by analysts.

Analysts said oil prices would remain supported by signs of stronger demand in the United States, the world's top crude consumer, as well as fears of a disruption in Middle East supply caused by Egypt's political turmoil.

Oil prices have risen this week, also despite weak economic data out of China, the world's biggest consumer of energy.

China reported that economic growth slowed to a 7.5-percent pace in the April-June quarter, down from 7.7 percent in the previous three months.

The slower growth rate came in as expected, which analysts said might explain the lack of impact on the market.

Source: http://www.businessspectator.com.au/news/2013/7/20/oil-prices-end-week-higher

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