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Oil prices end week on stable note

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(Globalpost/GlobalPost)

Global oil prices steadied Friday at the end of a volatile week that was marked by mostly upbeat US economic data, fears over a Chinese credit crunch and the potential end of the Federal Reserve's economic stimulus.

Brent North Sea crude for delivery in August gained six cents to $102.88 per barrel in London late afternoon deals.

New York's main contract, West Texas Intermediate light sweet crude for August, eased two cents to $97.03 a barrel.

"This week was mostly macro driven; volumes are very thin and we are simply benefiting from firmer equity markets as concerns over China eased," said VTB Capital analyst Andrey Kryuchenkov.

"The People's Bank of China has also been seeking to calm markets over liquidity concerns, helping sentiment a little."

He added: "At the same time the upside will also be limited given recent demand fears and the comfortable long-term supply cushion."

Crude oil fell at the start of the week on economic stimulus concerns surrounding the United States and China, the world's two biggest consumers of crude.

Markets were rocked by concern over the possible withdrawal of Fed stimulus and the emergence of a liquidity crisis in China, dealers said.

Global stock markets had already slumped last week after the Fed had signalled that it might soon begin winding down its massive bond-buying policy, known as quantitative easing (QE).

A crisis in the Chinese banking system, which has caused lenders to put the brakes on loans, added to the pressure.

However, New York rebounded sharply on Monday after a leak forced the closure of Canadian pipelines, raising concerns about US supply disruptions.

Prices rose modestly Tuesday after a rash of positive US economic data underpinned hopes for stronger growth in the world's largest economy.

They advanced further on Wednesday, mirroring a rally in equity markets, despite news that the Commerce Department slashed the estimate of first quarter US economic growth from 2.4 percent to 1.8 percent.

Crude futures extended gains on Thursday on the back of more upbeat US economic data and easing concerns over China's liquidity crisis.

The market rose further on Friday as dealers digested more upbeat US data and comments from a Federal Reserve official that its stimulus programme will not end soon.

In a coordinated effort, several Fed officials over the past two days stressed in speeches and briefings that markets had over-reacted to last week's Fed announcement that it could begin tapering its QE programme later this year.

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http://www.globalpost.com/dispatch/news/afp/130628/oil-prices-end-week-stable-note