OIL prices rose yesterday on signs that China, the world's second-largest economy, may avoid a significant slowdown.

China said its economy grew by 8.9 percent in the fourth quarter, which was slower than the previous quarter. Experts say that level is still robust. Retail and factory production improved in December. Oil demand increased 1.4 percent in the fourth quarter from a year ago and was up 6.4 percent in 2011 from 2010, according to data cited by Barclays Capital.

Benchmark US crude rose US$2.01, or 2 percent, to finish at US$100.71 per barrel in New York. Brent crude rose 19 cents to end at US$111.53 a barrel in London.

China is the world's second-largest oil consumer after the US It is also one of the biggest importers of commodities and raw materials, so its economic growth can affect countries that provide crude oil and raw materials such as iron ore, copper and soybeans.

China's growth slowed last year as the government imposed a number of measures to control inflation and prevent the economy from overheating.

Crude's gains also followed increases on stock markets as successful bond auctions by France and Spain eased jitters over Europe's debt crisis and suggested Standard and Poor's downgrades of the countries is having little effect on investor confidence.

In other New York Mercantile Exchange trading, US natural gas prices were at a 10-year low as mild winter weather in many parts of the country kept thermostats turned down. The National Weather Service and other forecasters see above-average temperatures persisting for at least the next few weeks. The nation's natural gas supplies remain well above the five-year average.

Natural gas fell 18 cents, or 6.8 percent to US$2.49 per 1,000 cubic feet in New York. That price is down 17 percent for the month and 45 percent lower than a year ago.

In other trading, heating oil rose about a penny to US$3.04 per gallon and gasoline futures rose 4 cents to US$2.77 per gallon.
 

Source:shanghaidaily