The price of oil rose to near US$87 a barrel on Monday, boosted by expanding exports in Germany and higher growth in electricity consumption and industrial production in China.
By early afternoon in Europe, benchmark West Texas Intermediate crude for January delivery was up 79 cents to US$86.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 33 cents to finish at $85.93 a barrel on Friday.
Exports from Germany, Europe’s biggest economy, rose by 0.3 per cent in October after falling by 2.4 per cent in September and were 10.6 per cent higher than in October 2012.
Analysts had been expecting German exports to continue their slide and the positive figures lifted expectations that oil demand could improve.
Italian Prime Minister Mario Monti’s weekend announcement that he would resign by the end of the year sent stock markets lower across Europe and pointed to a lower open in the United States, but did not seem to deter oil prices.
Signs that China’s economy is recovering from a slowdown also suggested an increase in energy demand.
The Chinese government reported Sunday that in November factory output increased 10.1 per cent from a year earlier, up from an annual rise of 9.6 per cent in October. Retail sales rose 14.9 per cent, up from October’s 14.5 per cent.
Markets were also awaiting this week’s meeting in Vienna of the Organization of the Petroleum Exporting Countries, which produces about a third of the world’s oil supply.
“No change to the production target is likely,” said analysts at Commerzbank in Frankfurt. “It will be interesting to see, however, whether members can agree on a new secretary general. If not, this would be a bad sign for the markets, for disagreement within OPEC means that the organization will hardly be able to decide unanimously to reduce the overproduction.”
Brent crude, which is used to price international varieties of oil, added $1.30 to US$108.32 a barrel, on the ICE Futures exchange in London.
In other energy futures trading on the Nymex, heating oil rose three cents to US$2.94 a U.S. gallon (3.79 litres), wholesale gasoline was up 3.68 cents to US$2.6342 per gallon and natural gas fell 7.4 cents to US$3.477 per 1,000 cubic feet.
(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS.UN), (TSX:CVE)