Oil nears $89 on hopes for China, U.S. to bolster their economies

PanARMENIAN.Net - Oil rose to near $89 a barrel Tuesday, July 17 in Asia amid hopes China and the U.S. will take new steps to bolster their economies, AP reports.

Benchmark crude was up 18 cents at $88.61 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to end at $88.43 in New York on Monday. Brent crude was up 11 cents at $103.48 on the ICE futures exchange in London.

Oil's rise was driven by expectations that U.S. and China will do more to prop up slowing economic growth. The two countries are the world's biggest and second-biggest crude consumers. As consumers spend more and the economy strengthens, demand for oil is likely to rise.

Some analysts believe Federal Reserve Chairman Ben Bernanke will talk about additional stimulus when addresses Congress on Tuesday and Wednesday.

Expectations of possible Chinese stimulus measures rose after Premier Wen Jiabao's weekend promise of tax breaks and other aid to struggling small businesses. China's second-quarter growth fell to a three-year low of 7.6 percent but analysts said a rebound might be in sight.

In other futures trading, heating oil was up 0.5 cent at $2.833 a gallon and gasoline rose 1.2 cents to $2.74 a gallon. Natural gas was steady at $2.801 per 1,000 cubic feet.