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Oil up near $77 as US equities, economy mixed

Oil up near $77 as US equities, economy mixed

Oil prices moved up toward $77 a barrel Friday as traders eyed small gains in stock markets and a stronger euro amid a sluggish U.S. economic recovery.
By early afternoon in Europe, benchmark crude for August delivery was up 21 cents to $76.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 42 cents to settle at $76.62 on Thursday.
Oil has traded around $77 this week as mixed signals from second-quarter U.S. corporate earnings reports and economic indicators suggest an uneven recovery. The Dow Jones industrial average was little changed Thursday, rising 0.07 percent, while most world markets were slightly higher on Friday.
Crude traders often look to stock markets as a barometer of overall investor sentiment.
"Oil remains attached to equities for now and as a result, economic guidance should continue to rule," Ritterbusch and Associates said in a report.
Global oil consumption gains this year have been led by developing countries, especially China, the world's third-largest economy. China said Thursday its gross domestic product expanded by 10.3 percent in the second quarter from a year earlier, down from 11.9 percent growth in the first quarter.
"Chinese oil demand continues to scale new highs," Barclays Capital said in a report. "China remains the single largest contributor to global oil demand growth this year."
"Market fears of an imminent Chinese slowdown may be a bit overblown," it added.
Analysts also mentioned the bullish effects _ if not yet on oil prices but on market sentiment _ of the apparent success of BP's attempts to halt the flow of oil from its broken well in the Gulf of Mexico.
"Even the BP news, while still tentative at this stage, should be considered a positive for the markets, as it could ease the negative psychology that has been in the background for some time now," said senior commodity analyst Edward Meir of MF Global in New York.
The U.S. dollar's recent weakness against the euro was also seen helping sustain oil prices, as crude became cheaper for investors holding other currencies.
On Friday, the euro rose to $1.2958 in European trading from $1.2897 late Thursday in New York.
"The surprising strength in the euro ... should bode well for the long side," Meir said.
In other Nymex trading in August contracts, heating oil was up 0.83 cent to $2.0266 a gallon, gasoline gained 0.41 cent to $2.0648 a gallon and natural gas rose 1.6 cents to $4.602 per 1,000 cubic feet.
In London, Brent crude was up 8 cents to $76.13 a barrel on the ICE Futures exchange.
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Associated Press writer Alex Kennedy in Singapore contributed to this report.


Updated : 2021-05-10 10:19 GMT+08:00