Investing.com - Crude oil futures rose 1% on Friday on the back of broadly better-than-forecast data out of China, but prices continued to trade near a four-month low amid growing concerns over U.S. fiscal policy and the outlook for the euro zone.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December rose 1.25% Friday to settle at USD86.06 a barrel by close of trade. On the week, New York-traded oil futures advanced 1.4%.
Oil prices found support Friday after official data showed that Chinese consumer price inflation fell unexpectedly in October, ticking down 0.1% after a 0.3% increase the previous month.
Lower inflation gives policymakers more leeway to launch new stimulus programs intended to boost the economy.
A separate report showed that industrial production in China rose by 9.6% in October, more than the expected 9.4% increase and following a 9.2% rise the previous month.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, in the U.S., a report showed that U.S. consumer confidence improved more-than-expected in November.
The University of Michigan preliminary consumer sentiment index rose to 84.9, the fourth successive monthly increase and the highest level since July 2007, from 82.6 in October, compared to expectations for a reading of 83.0.
Gains were limited after Germany’s Economic Ministry warned Friday that economic growth was likely to weaken in the fourth quarter and going into the first quarter of 2013, underlining fears over a slowdown in the bloc’s largest economy.
Elsewhere, official data showed that industrial production in France fell in October and the country’s central bank said it expected the economy to enter a recession by the end of this year.
Greece was also on investors mind. Market participants were anticipating a Greek vote on the 2013 budget on Sunday, just days after the country’s parliament narrowly approved a new austerity package needed to secure the next tranche of bailout funds.
Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.
Eurozone finance ministers are to meet in Brussels on Monday, although they are not expected to approve releasing the latest aid tranche to Greece.
Meanwhile, uncertainty over whether Spain will request a bailout continued to cloud the outlook for the euro after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to seek aid before the end of this year.
Investors have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
NYMEX oil prices touched a four-month low of USD84.05 a barrel on November 7, as investor focus turned from U.S. President Barack Obama’s re-election to concerns over the U.S. “fiscal cliff”, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1.
Ratings agency Fitch warned earlier in the week that the U.S.’s triple-A rating would be at risk if Congress and President Barack Obama did not immediately take action to avoid the crisis.
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
In the week ahead, investors will be anticipating preliminary data on third quarter growth from the euro zone, amid concerns that the economic downturn in the region is deepening. Markets will also be closely following developments in Greece and Spain.
In addition, Japan is to produce data on third quarter economic growth, while the Federal Reserve is to release the minutes of its most recent policy-setting meeting.
Meanwhile, oil traders will also focus on ongoing tensions between Iran and the West. News reports this week said that Iranian fighter planes shot at an unarmed American drone last week.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for December delivery rallied 2% Friday to settle at USD109.40 a barrel.
The London-traded Brent contract added 3.3% over the week, with the spread between the Brent and the crude contracts standing at USD23.34 a barrel.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December rose 1.25% Friday to settle at USD86.06 a barrel by close of trade. On the week, New York-traded oil futures advanced 1.4%.
Oil prices found support Friday after official data showed that Chinese consumer price inflation fell unexpectedly in October, ticking down 0.1% after a 0.3% increase the previous month.
Lower inflation gives policymakers more leeway to launch new stimulus programs intended to boost the economy.
A separate report showed that industrial production in China rose by 9.6% in October, more than the expected 9.4% increase and following a 9.2% rise the previous month.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, in the U.S., a report showed that U.S. consumer confidence improved more-than-expected in November.
The University of Michigan preliminary consumer sentiment index rose to 84.9, the fourth successive monthly increase and the highest level since July 2007, from 82.6 in October, compared to expectations for a reading of 83.0.
Gains were limited after Germany’s Economic Ministry warned Friday that economic growth was likely to weaken in the fourth quarter and going into the first quarter of 2013, underlining fears over a slowdown in the bloc’s largest economy.
Elsewhere, official data showed that industrial production in France fell in October and the country’s central bank said it expected the economy to enter a recession by the end of this year.
Greece was also on investors mind. Market participants were anticipating a Greek vote on the 2013 budget on Sunday, just days after the country’s parliament narrowly approved a new austerity package needed to secure the next tranche of bailout funds.
Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.
Eurozone finance ministers are to meet in Brussels on Monday, although they are not expected to approve releasing the latest aid tranche to Greece.
Meanwhile, uncertainty over whether Spain will request a bailout continued to cloud the outlook for the euro after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to seek aid before the end of this year.
Investors have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
NYMEX oil prices touched a four-month low of USD84.05 a barrel on November 7, as investor focus turned from U.S. President Barack Obama’s re-election to concerns over the U.S. “fiscal cliff”, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1.
Ratings agency Fitch warned earlier in the week that the U.S.’s triple-A rating would be at risk if Congress and President Barack Obama did not immediately take action to avoid the crisis.
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
In the week ahead, investors will be anticipating preliminary data on third quarter growth from the euro zone, amid concerns that the economic downturn in the region is deepening. Markets will also be closely following developments in Greece and Spain.
In addition, Japan is to produce data on third quarter economic growth, while the Federal Reserve is to release the minutes of its most recent policy-setting meeting.
Meanwhile, oil traders will also focus on ongoing tensions between Iran and the West. News reports this week said that Iranian fighter planes shot at an unarmed American drone last week.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for December delivery rallied 2% Friday to settle at USD109.40 a barrel.
The London-traded Brent contract added 3.3% over the week, with the spread between the Brent and the crude contracts standing at USD23.34 a barrel.