MercoPress. South Atlantic News Agency

Price of oil picks up after China announces it will bolster economic growth

Saudi Arabia’s Oil Minister Ali al-Naimi said oil should stabilize at 100 dollars per barrel

The price of oil rose for the first time in seven days in New York after China pledged to boost the nation’s economy and Goldman Sachs Group Inc. said the balance between supply and demand of crude is tightening.

Futures gained as much as 0.6% after settling at the lowest level in almost seven months on May 18. The extent of oil’s decline was unwarranted, Goldman said in a report. China will focus more on bolstering economic growth, the official Xinhua News Agency reported on Sunday, citing Premier Wen Jibao.

Prices slid earlier after Saudi Arabia’s output in March climbed to the second-highest level in at least 31 years before a European embargo on Iran that starts in July. Crude’s relative strength index remained below 30, signalling it may be oversold.

Crude for June delivery rose as much as 56 cents to 92.04 dollars a barrel in electronic trading on the New York Mercantile Exchange. Brent oil for July settlement rose 69 cents, or 0.6%, to 107.83 dollars a barrel on the London-based ICE Futures Europe exchange.

Brent, the benchmark price for more than half the world’s petroleum, has dropped about 4% since May 13, when Saudi Arabia’s’s Oil Minister Ali al-Naimi said it should fall to 100 dollars a barrel because global supply is outweighing demand.

Prices have fallen as Saudi Arabia’s output in March climbed to the second-highest level in at least 31 years before a European Union embargo on Iran that starts in July.

Saudi Arabia increased daily output to 9.923 million barrels in March, according to the Joint Organization Data Initiative. That surpassed Russia, which pumped 9.92 million barrels a day, for the first time in six years. JODI is supervised by the Riyadh-based International Energy Forum and compiles data provided by member governments.

Oil has also fallen this month amid speculation the US and its allies will use strategic supplies to protect the global economy as they prepare for the EU ban on imports from Iran.

The US accounted for about 21% of the world’s oil consumption in 2010, according to BP Statistical Review of World Energy while China accounted for 11%.

The average price for regular gasoline at US filling stations fell 6.19 cents in the past two weeks to 3.7833 dollars a gallon, according to Lundberg Survey Inc. The survey is based on information received from about 2.500 stations by the Camarillo, California-based company. The price is 12.41 cents lower than a year earlier, when the average was 3.9074 dollars.