Crude oil prices advanced slightly Tuesday as investors awaited Federal Reserve Chairman Ben Bernanke's testimony for hints on further monetary easing.
Light sweet crude for August delivery gained 0.11 percent or 10 cents to $88.53 a barrel in electronic trading on the New York Mercantile Exchange during European trading hours. Brent crude oil futures for September delivery declined 0.19 percent or 20 cents to $103.57 a barrel on the ICE futures exchange in London.
Market participants are hoping that the U.S. Fed and China will announce monetary easing measures to spur economic growth. The recent batch of disappointing economic readings from the U.S., including Monday’s weak retail sales, raised fears that the strength of the economic recovery in the world's largest economy was losing steam.
Investors are optimistic that weak economic data, coupled with intensifying crisis in the euro zone and a lower International Monetary Fund global growth forecast, will force policy makers to announce further monetary easing measures.
Investors are also hopeful of monetary easing measures from China as data released last week by the National Bureau of Statistics showed that the world’s second largest economy expanded from April through June at the slowest pace in three years. Expectations on further stimulus measures from China mounted after Premier Wen Jiabao warned Sunday that the recovery in the Asia’s largest economy was not stable.
“Expectations and hopes are building that we're going to see some intervention. But the Market will be disappointed by Mr. Bernanke's remarks Tuesday,” Matt Smith, an analyst at Summit Energy, told the Wall Street Journal.
Crude futures surged Monday on hopes of economic stimulus and news that a US navy vessel fired at a small boat off the coast of the United Arab Emirates, killing one person and injuring three. Light sweet crude for the August delivery gained $1.33 and settled at $88.43 a barrel on the New York Mercantile Exchange while Brent crude oil raised $1.15 to settle at $103.55 a barrel.