Oil prices march upward for a second day on Spain budget, hope for China stimulus

BANGKOK – Hopes that the global economy might see some improvement after Spain announced far-reaching steps to fix its ailing economy helped keep oil prices on the upswing for a second day.

Benchmark West Texas Intermediate crude for November delivery was up 61 cents at US$92.46 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose $1.87 to finish at US$91.85 a barrel on the Nymex on Thursday.

Brent crude gained $1.28 to US$113.29 on the ICE Futures Exchange in London.

“Risk appetite improved yesterday on the Spanish budget,” analysts at Credit Agricole CIB in Hong Kong said in a market commentary. “With the Spanish budget paving the way for an official bailout request … renewed concern about the Eurozone crisis has eased.”

After three straight days of declines, oil posted gains in Asia on Thursday, helped by expectations the People’s Bank of China will soon take more steps to stimulate the world’s No. 2 economy. Spain later announced severe budget cuts intended to convince the world that it can meet deficit-reduction targets.

Still, oil analyst Stephen Schork said he expects “high volatility” as oil contracts for October expire.

In other Nymex trading, heating oil rose 2.1 cents to US$3.172 a U.S. gallon (3.79 litres), wholesale gasoline gained 1.2 cents to US$3.156 a gallon and natural gas rose 0.1 cent to $3.306 per 1,000 cubic feet.