LONDON (AP) — The price of oil rebounded Friday as positive economic news from China outweighed expectations that the U.S. Federal Reserve would soon start withdrawing its bond-buying program.
Benchmark crude for September delivery was up $1.24 to $104.62 per barrel by midday London time in electronic trading on the New York Mercantile Exchange. The contract had fallen 97 cents to at $103.40 on Thursday.
China, the world's No. 2 economy after the United States, reported Friday that July's producer prices — the price of goods as they leave factories — fell less rapidly than a year earlier, a sign that demand may be improving. The official Xinhua News Agency said retail sales grew 13.2 percent in July from a year earlier, slightly down from June. Industrial production grew 9.7 percent, up from June's 8.9 percent and the highest year-on-year growth in five months.
Oil fell as low as $102.22 before trimming its losses late Thursday after the U.S. Labor Department said the number of people who applied for unemployment benefits dropped to the lowest level since November 2007. While the news was positive, it drove up speculation that the Fed would start phasing out measures that have kept long-term interest rates at record low levels.
The Fed's policies have sparked investment in riskier assets such as stocks and oil. But comments from Fed officials this week indicate the central bank may be ready to begin reducing its monthly purchases of $85 billion in bonds soon as September.
Brent crude, traded on the ICE Futures exchange in London, rose 92 cents to $107.60 a barrel.
In other energy futures trading on Nymex:
— Heating oil rose 1.7 cents to $2.973 a gallon.
— Natural gas rose 2.5 cents to $3.322 per 1,000 cubic feet.
— Wholesale gasoline rose 3 cents to $2.892 a gallon.