Oil rises on China calls for growth, Iran

Mon May 21, 2012 4:25pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Oil prices rose on Monday after China's premier called for more efforts to stimulate growth and as investors cautiously awaited results of Iran's second round of revived talks with major powers over Tehran's nuclear program.

Chinese Premier Wen Jiabao's call for "giving more priority to maintaining growth" signaled Beijing's willingness to take action after several recent economic indicators suggested that the economy could continue to slow.

"China's central bank has already cut bank reserve requirements to stimulate growth and such comments suggest that even more may be done in the months ahead to ward off a hard landing," Addison Armstrong, a senior director at Tradition Energy, said in a note.

Hopes for Chinese stimulus and the Group of Eight industrialized nations' emphasis on the need for growth and jobs at their Saturday summit provided a lift to oil, U.S. and European equities and key industrial feedstock copper. .N .EU <MET/L>

The G8 backed keeping Greece in the euro zone, but gave no specific prescription for resolving the widening debt crisis.

G8 leaders did raise pressure on Iran by signaling a readiness to tap strategic oil stockpiles quickly if sanctions on Tehran strain supplies.

Brent July crude rose $1.67 to settle at $108.81 a barrel, reaching $109.26 intraday. The gain snapped a string of three lower settlements and followed Brent's 10.59 percent slide in the preceding three weeks.

After six straight lower settlements, U.S. June crude rose $1.09 to settle at $92.57. The June contract expires on Tuesday, with U.S. crude also trying to break a string of three weekly losses.   Continued...

Containers filled with oil cleaned up from the oil spill site are seen at Beilianggang port in Dalian, Liaoning province July 24, 2010. REUTERS/Stringer