Forexpros – Crude oil futures were modestly higher during European morning hours on Tuesday, as expectations policy makers in the U.S. and China will increase efforts to boost their slowing economies countered lingering fears over the health of the global economy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD88.47 a barrel during European morning trade, adding 0.32%.
The August contract is due to expire on Friday, July 20.
Meanwhile, the more actively traded contract for September delivery eased up 0.05% to trade at USD88.88 a barrel.
The September contract traded in between a tight range of USD88.45 a barrel, the daily low and a session high of USD89.11.
Expectations for another round of easing from the Federal Reserve mounted Monday after official data showed that U.S. retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May and a similar decline in April.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Investors were now looking ahead to Bernanke’s semi-annual testimony on the U.S. economy later in the day, amid ongoing speculation over whether the U.S. central bank will introduce more easing to stimulate the economy.
The Fed Chairman is due to testify before the Senate Banking Committee later on Tuesday, and then before the House Financial Services panel Wednesday.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Hopes for additional stimulus measures from China mounted after Chinese Premier Wen Jiabao said over the weekend that policy makers were likely to introduce measures to boost growth in the second half of the year
The comments followed government data released last week showing China’s second quarter economic growth slowed to a three-year low of 7.6%, compared to growth of 8.1% in the first quarter.
The Asian nation is the world’s second largest oil consumer behind the U.S. and has been the engine of strengthening demand.
However, markets remained jittery after the International Monetary Fund reduced its outlook for global growth to 3.5% from its April forecast of 3.6%, citing the impact of the euro zone’s ongoing debt crisis on emerging market economies.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery eased up 0.1% to trade at USD103.48 a barrel, with the spread between the Brent and crude contracts standing at USD15.01.
London-traded Brent prices rose to as high as USD103.72 a barrel earlier in the day, the highest since May 31.
A fresh warning by Iran to block the Strait of Hormuz if its security is threatened supported Brent prices.
The U.S. Treasury and State Departments said late last week that it will target a number of banks and shipping companies it believes are being used to evade international sanctions on Iranian oil exports.
A European Union embargo on purchases of Iranian oil came into full effect on July 1.
Brent prices have been well-supported in recent sessions amid growing concerns over tightening supplies from Norway, outages in the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.
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