The price of oil climbed toward $96 a barrel Tuesday, extending gains as supply concerns outweighed uncertainty about economic growth in the United States and China.
By early afternoon in Europe, benchmark oil for August delivery was up 57 cents to $95.75 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.49 to close at $95.18 on Monday.
Supply risks were increasingly in focus as traders voiced concerns about the escalating civil war in Syria and the temporary closure of two major oil pipelines in Canada due to damage probably caused by heavy flooding.
"The oil markets are still in the grip of fears about an imminent end to the Fed's bond purchasing program and a slowdown in Chinese growth," said a report from Commerzbank in Frankfurt. "All that prevented the price from falling even further were the supply risks."
Oil sank by $4.55 a barrel, or 4.7 percent, on Thursday and Friday after the Federal Reserve spooked investors by signaling the end of a bond-buying program that has boosted the economy.
On Monday, oil dropped as low as $92.67 a barrel because of growing worries that China's decision to clamp down on informal lending could hamper growth in a major energy consuming country.
But it rebounded after Wall Street indexes clawed back losses and then kept climbing Tuesday in Asia and Europe as some markets returned to positive territory. Oil trading is often influenced by stock market trends which can reflect the state of confidence in the economic outlook.
Markets will also be paying attention to a series of U.S. economic indicators to be released later Tuesday, including data on consumer confidence, new-home sales, home prices and orders for durable goods.
Brent crude, which is used to set prices for oil used by many U.S. refineries to make gasoline, was up 39 cents at $101.55.
In other energy futures trading on the Nymex:
— Natural gas gained 0.4 cent to $3.743 per 1,000 cubic feet.
— Heating oil rose 1.27 cents to $2.8657 a gallon.
— Wholesale gasoline added 1.29 cents to $2.74 a gallon.
- Basic Materials Industry
- Commodity Markets
- New York Mercantile Exchange