Oil May Rise on Stronger Demand, Survey Shows
Oil may rise next week as stronger economic growth boosts demand, a Bloomberg survey showed.
Nine of 18 analysts, or 50 percent, forecast crude will rise through Jan. 4. Eight respondents, or 44 percent, predicted a drop. One forecast little change. Last week, 39 percent of analysts projected a gain.
Applications for jobless benefits decreased to 350,000 in the U.S. last week, the Labor Department said yesterday. U.S. gasoline demand increased 4.5 percent in the week ended Dec. 21, according to MasterCard Inc. (MA) President Barack Obama is pressing lawmakers to craft an interim deal to prevent $600 billion in automatic tax increases and spending cuts set to start Jan. 1.
“There is no doubt that the economic data is doing better,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. Budget talks will result in “some type of solution. The question is whether it’s going to be before the deadline or after.”
Gasoline consumption rose to 8.95 million barrels a day last week from 8.56 million the previous week, according to data from MasterCard’s SpendingPulse report on Dec. 26.
Obama will meet with congressional leaders at 3 p.m. Washington time at the White House to seek to resolve the budget impasse. The U.S. House of Representatives is scheduled to convene the evening of Dec. 30.
Oil rose $2.14, or 2.4 percent, to $90.80 a barrel this week on the New York Mercantile Exchange, the third consecutive increase. Prices are down 8.1 percent this year.
The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
Bloomberg’s survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were: RISE NEUTRAL FALL 9 1 8
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