China news helps Brent crude stay steady

Brent crude held steady above $102 per barrel yesterday on optimism over the outlook for demand growth as China’s Premier Wen Jiabao said the government would step up efforts to boost the economy of the world’s second-largest oil consumer.

Oil prices rallied on Friday after China’s economy expanded in line with expectations, easing concerns a slowdown in Europe was hurting a lot more than expected.

Even though growth slowed for the sixth successive quarter, Asian shares and the euro extended their rally yesterday on signs the steps Beijing has taken so far were underpinning the economy.

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“Short-term sentiment should be good for oil as well as other risk assets.

“It is a combination of two factors – China’s growth coming in line with expectations and hopes for more measures to boost the economy,” said a markets ana-lyst.

“We are seeing prices come off a bit due to profit-taking.

“Any dips will face quite strong support levels.”

Prices are also drawing support from hopes Europe’s fiscal crisis will stabilise after Chancellor Angela Merkel said at the weekend that she was confident a majority of German lawmakers would back aid for Spain’s ailing banks.