Oil rises near US$94 on China, US hopes

Benchmark oil for February delivery was up 33 cents to US$93.89 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped 26 U.S. cents to finish at US$93.56 a barrel in New York on Friday.

Gordon Kwan, head of energy research at Mirae Asset Securities Ltd. in Hong Kong, said oil prices were rising on signs that the fragile economic recoveries in the world's two biggest economies appeared to be gaining traction. The U.S. housing market has shown steady improvement, while China's trade growth rebounded strongly in December.

“China and the U.S. appear to be on a very solid track of economic recovery. This supports oil prices at much higher levels.” He said that prices were also moving up because of increased energy consumption in China, which is enduring its coldest winter in nearly three decades.

“There is the possibility that West Texas Intermediate could reach US$95 per barrel in the coming days and Brent could go to US$115,” Kwan said.

Brent crude, used to price international varieties of oil, was up 27 U.S. cents to US$110.91 per barrel on the ICE Futures exchange in London.

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