Oil extends gains above $106 a barrel

Oil extends rise above $106 a barrel as traders wait for Fed news, US retail sales

Oil extends gains above $106 a barrel

BANGKOK (AP) -- The price of oil rose modestly Tuesday as traders waited for more economic news from the U.S.

Benchmark crude for September delivery was up 20 cents to $106.31 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gained 14 cents to close at $106.11 on Monday.

"Everything is in a bit of a wait-and-see approach," said Stan Shamu, market strategist at IG in Melbourne, Australia, as traders waited to see whether the U.S. Federal Reserve would begin winding down its massive stimulus program.

The Fed launched a major bond-buying program more than four years ago to help the U.S. economy weather the fallout from the global financial crisis. Recent data have shown that the economy is strengthening, raising expectations that the Fed could start tapering off its purchases as early as September.

The Fed's strategy, which has depressed returns on bonds, has made stocks and commodities more attractive to investors. If the program is drawn down, that could cause a bit of weakness in energy commodities, Shamu said.

"But it's always positive to see the U.S. economy is ticking along," he said. Traders were also waiting for the release of U.S. retail sales data later in the day to gauge consumer demand, a key driver of growth.

Brent crude, traded on the ICE Futures exchange in London, rose 10 cents to $109.07 a barrel.

In other energy futures trading on Nymex:

-- Heating oil rose 0.9 cent to $3.03 a gallon.

-- Wholesale gasoline rose 0.8 cent to $2.912 a gallon.

-- Natural gas rose 2.2 cents to $3.332 per 1,000 cubic feet.

Updated : 2021-03-05 18:52 GMT+08:00