Crude edged up on Friday, capping two consecutive weeks of trading above $80, after China signalled it would maintain its economic stimulus, rekindling hopes for accelerating growth to drain excess oil supplies.
China’s Premier Wen Jiabao, in his annual address to the National People’s Congress, said the world’s second-largest oil consumer will continue an appropriately easy monetary stance and an active fiscal policy.
U.S. crude for April gained 38 cents to $80.59 a barrel by 0325 GMT, after touching a seven-week high of $81.23 two days ago. London ICE Brent for April advanced 37 cents to $78.91.
Japan’s Nikkei average rose 2.1 percent after better-than-expected U.S. monthly retail sales, but analysts anticipate a report later on Friday to show U.S. non-farm payrolls fell in February because of severe snowstorms.
“Fundamentally, thanks to the cold weather in the northern hemisphere, stocks, including floating storage, are decreasing,” said Keichi Sano, general manager of research at SCM Securities in Tokyo.
“But the market doesn’t look so strong to break above the $85 level,” Sano said. “Oil is trading in a very tight range despite recent fear of tightening monetary policy in China or Greece troubles, or upside potential because of Iran tensions.”
The euro fell versus the dollar on Thursday, sending crude prices lower, as comments by the European Central Bank reinforced the view interest rates in the region will remain low in the foreseeable future.
A stronger dollar tends to pressure oil because it makes dollar-denominated commodities more expensive for other currency holders.
New York crude has traded in a $69-$84 range over the past few months amid uncertainty about the speed of the global economic recovery. Some traders and analysts say currency movements may play an important role in pushing prices out of those limits.
“I don’t think the market can break the range yet, but the euro-dollar is moving quite crazy, so it can eventually give some reason to break,” said Sano.
Friday’s U.S. employment report is expected to show a loss of 50,000 jobs in February, compared with 20,000 job cuts in January, a Reuters poll of economists shows. But some market watchers said an even greater number of job losses was already priced in to the oil market.
A militant faction in Nigeria’s Niger Delta said on Thursday it had blown up an oil facility operated by Italy’s Agip, its second attack in as many days, and warned foreign oil companies to leave the region. There was no independent confirmation of the attack.