Crude oil rose for the first time in four days after a government report showed that the U.S. economy expanded at the fastest pace in six years, signaling demand may rise in the world’s biggest energy market. Oil climbed as much as 1.6 percent after the Commerce Department said U.S. gross domestic product grew by 5.7 percent in the fourth quarter, exceeding the median forecast of economists surveyed by Bloomberg News. It was the best performance since the third quarter of 2003. Oil has lost 6.9 percent in January, the first monthly decline since July.
“It’s a good GDP number, and frankly that’s what the market needed to see,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “If there are any doubters out there that the economy is not in recovery, this should quash that.” Crude oil for March delivery increased 71 cents, or 1 percent, to $74.35 a barrel at 10:10 a.m. on the New York Mercantile Exchange. Earlier, it touched $74.82.
Oil has fallen 12 percent since reaching a 15-month high of $83.95 a barrel on Jan. 11 amid concern the U.S. government will limit trading by banks and that China will take further steps to cool its economy. China is the fastest-growing energy market.
“We might have gotten more of a bounce off this GDP number if the Chinese weren’t raising the reserve requirements for the banks and slowing lending,” said Phil Flynn, vice president of research at PFGBest in Chicago.....Read the entire article.
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