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By Moming Zhou
WASHINGTON - Oil extended a seven-week gain in New York as orders for durable goods in the U.S. jumped, adding to optimism that an economic recovery will boost fuel demand.
Prices advanced as much as 1 percent after the Commerce Department said orders rose 4.6 percent in December. The profits of Chinese industrial companies increased for a fourth month last month, the National Bureau of Statistics said yesterday. Oil also gained as clashes flared for a fifth day in Egypt.
“The durable goods number is very good and it bodes well for energy demand,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The biggest concern about Egypt is that it will spread to other areas and the instability is adding to oil’s risk premium.”
West Texas Intermediate crude for March delivery rose 89 cents, or 0.9 percent, to $96.77 a barrel at 9:03 a.m. on the New York Mercantile Exchange. Trading volume was 5.5 percent below the 100-day average for the time of day. WTI completed the longest run of weekly advances in almost four years last week.
Brent for March settlement increased 41 cents, or 0.4 percent, to $113.69 a barrel on the London-based ICE Futures Europe exchange. Volume was 9.9 percent below the 100-day average. The European benchmark contract was at a premium of $16.92 to WTI. The gap was $17.40 on Jan. 25.
Growth in last month’s durable goods orders beat the median forecast of a 2 percent advance by economists surveyed by Bloomberg. Excluding demand for transportation equipment, which is often volatile, orders increased 1.3 percent, also beating the median projection.
Net income of China’s industrial companies increased 17.3 percent from a year earlier to 895 billion yuan ($144 billion) in December, after a 22.8 percent jump in November, the statistics bureau said,
The nation’s economic growth will accelerate to 8.4 percent this year, the Chinese Academy of Sciences forecast Jan. 26 in its annual outlook. Gross domestic product increased 7.8 percent last year, government data show.
The U.S. and China are the world’s largest oil-consuming countries.
“We can be a little bit optimistic on the economic recovery, and of course on China and the U.S.,” said Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo who says WTI may climb as high as $100 a barrel this week, while Brent will trade from $112 to $118. “The oil market is trending to the upside.”
About 50 people have died in Egyptian clashes since Jan. 25. President Mohamed Mursi instituted a state of emergency for 30 days in the provinces of Port Said, Suez and Ismailiya.