Oil stabilizes near $106 after recent big gainsBy The Associated Press , Associated Press
Aug. 12, 2013 6:36 AM ET
LONDON (AP) — The price of oil stabilized Monday after enjoying big gains last week, when improved Chinese economic data suggested demand for crude might increase.
Benchmark oil for September delivery was up 1 cent to $105.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract had jumped $2.57, or 2.5 percent, on Friday, when Chinese industrial production implied the world's second-largest economy is not slowing as quickly as some had feared.
"I think we're seeing a bit of upward momentum from China," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
Spooner also said traders were looking ahead to Thursday, when the U.S. government releases inflation figures for July.
The U.S. Federal Reserve has a target of 2 percent for inflation. The fact that inflation is falling below that target has prompted some Fed officials to be concerned about a potential bout of deflation, which could be harmful to economic growth.
Lower-than-anticipated inflation could cause the Fed to delay the scaling back of its stimulus program, which was launched more than four years ago to help the world's biggest economy weather the fallout from the global financial crisis.
In June, Bernanke said the Fed will likely slow its bond-buying this year and end it in 2014 because the economy is strengthening.
In other energy futures trading on Nymex:
— Heating oil rose 0.3 cents to $2.9967 a gallon.
— Natural gas rose 3.5 cents to $3.265 per 1,000 cubic feet.
— Wholesale gasoline fell 0.5 cents to $2.9037 a gallon.