Investing.com - Crude oil futures traded higher during U.S. afternoon trade on Monday, as investors hoped that relentlessly bad data out of the U.S. and China will prompt policy makers to increase efforts to boost their slowing economies.
The U.S. and China are the world’s two largest oil consuming nations.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD87.81 a barrel during U.S. afternoon trade, moving up 0.65%
Oil futures trimmed losses after the Commerce Department said retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation for another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke's testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
Oil prices found further support after a report showed that the New York Federal Reserve’s index of manufacturing conditions improved more-than-expected in July, as the employment index inched up.
The FRBNY said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0.
Oil traders pay close attention to manufacturing numbers, as they are used as indicators to gauge future oil demand growth. The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, Chinese Premier Wen Jiabao warned over the weekend that China's economy has not yet entered a recovery and "difficulties may continue for some time."
He added that that policy makers were likely to introduce measures to boost growth in the second half of the year, according to the state-run Xinhua News Agency.
The comments followed government data released Friday showing China’s second quarter economic growth slowed to 7.6% from a year earlier, compared to 8.1% in the first quarter.
While the number was not as bad as feared, China's economy expanded at the slowest rate since the first quarter of 2009, fuelling hopes that policy makers in Beijing will soon begin a fresh round of stimulus to boost growth.
The Asian nation is the world’s second largest oil consumer behind the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery rose 0.4% to trade at USD101.83 a barrel, with the spread between the Brent and crude contracts standing at USD14.50.
London-traded Brent prices rallied to a three-week high of USD103.44 a barrel on July 13.
A fresh warning by Iran to block the Strait of Hormuz if its security is threatened supported Brent prices.
The U.S. Treasury and State Departments said late last week that it will target a number of banks and shipping companies it believes are being used to evade international sanctions on Iranian oil exports.
A European Union embargo on purchases of Iranian oil came into full effect on July 1.
Brent prices have been well-supported in recent sessions amid growing concerns over tightening supplies from Norway, outages in the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.
The U.S. and China are the world’s two largest oil consuming nations.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD87.81 a barrel during U.S. afternoon trade, moving up 0.65%
Oil futures trimmed losses after the Commerce Department said retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation for another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke's testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
Oil prices found further support after a report showed that the New York Federal Reserve’s index of manufacturing conditions improved more-than-expected in July, as the employment index inched up.
The FRBNY said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0.
Oil traders pay close attention to manufacturing numbers, as they are used as indicators to gauge future oil demand growth. The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, Chinese Premier Wen Jiabao warned over the weekend that China's economy has not yet entered a recovery and "difficulties may continue for some time."
He added that that policy makers were likely to introduce measures to boost growth in the second half of the year, according to the state-run Xinhua News Agency.
The comments followed government data released Friday showing China’s second quarter economic growth slowed to 7.6% from a year earlier, compared to 8.1% in the first quarter.
While the number was not as bad as feared, China's economy expanded at the slowest rate since the first quarter of 2009, fuelling hopes that policy makers in Beijing will soon begin a fresh round of stimulus to boost growth.
The Asian nation is the world’s second largest oil consumer behind the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery rose 0.4% to trade at USD101.83 a barrel, with the spread between the Brent and crude contracts standing at USD14.50.
London-traded Brent prices rallied to a three-week high of USD103.44 a barrel on July 13.
A fresh warning by Iran to block the Strait of Hormuz if its security is threatened supported Brent prices.
The U.S. Treasury and State Departments said late last week that it will target a number of banks and shipping companies it believes are being used to evade international sanctions on Iranian oil exports.
A European Union embargo on purchases of Iranian oil came into full effect on July 1.
Brent prices have been well-supported in recent sessions amid growing concerns over tightening supplies from Norway, outages in the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.