Oil rises to near $92 on hopes of central bank action

BANGKOK – The price of oil continued to climb Thursday, a day after its biggest gain in five months, as recent glum data from the U.S. and Germany boosted expectations of central bank action to shore up the global economic recovery.

Benchmark oil for June delivery was up 51 cents to US$91.94 at midday Bangkok time in electronic trading on the New York Mercantile Exchange. Oil had its biggest daily gain since December on Wednesday, as speculation grew that the European Central Bank will cut interest rates next week. The contract jumped $2.25, or 2.5 per cent, to finish at $91.43.

Reports released earlier this week pointing to a decline in monthly orders for U.S. durable goods as well as a drop in the Ifo index of German business confidence reinforced expectations that the U.S. Federal Reserve and the European Central Bank would extend support to their respective economies.

“Once more, weak European data was taken with rose-coloured glasses as investors and analysts alike see the German IFO print as another reason for the ECB to cut rates,” Evan Lucas of IG Markets in Melbourne said in a market commentary.

Oil prices were also lifted by a drop in U.S. crude inventories. The American Petroleum Institute said crude oil stocks had fallen by 845,000 barrels to 383.2 million barrels for the week ending April 19.

Brent crude, which is used to price oil used by many U.S. refiners, rose 44 cents to $102.17 a barrel on the ICE futures exchange in London.

In other energy futures trading on the Nymex:

— Gasoline rose 1.5 cents to $2.766 per gallon.

— Heating oil added 2.1 cents to $2.848 a gallon.

— Natural gas rose 0.1 cent to $4.167 per 1,000 cubic feet.