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Oil rose for a fourth day on speculation that the European Central Bank and the U.S. Federal Reserve will ease monetary policy to boost economic growth.
Prices gained as much 0.9 percent as the ECB and Fed officials indicated that they’re considering stimulus measures before meetings scheduled for next week. German Chancellor Angela Merkel and French President Francois Hollande said they will do “everything” necessary to protect the euro.
The ECB is preparing to buy bonds in the secondary market, followed by purchases in the primary market by government-funded bailout funds, Le Monde reported. The comments by Merkel and Hollande echoed a statement yesterday by ECB President Mario Draghi. He pledged that the euro will survive.
Germany and France are “bound by the deepest duty” to keep the euro area intact, Merkel and Hollande said in a joint statement after a telephone conference call today. The 17 members of the euro and other institutions must fulfill their commitments within their own areas of competence.
The Fed’s Federal Open Market Committee will consider the need for more stimulus at a two-day meeting that concludes Aug. 1. The ECB’s Governing Council meeting in Frankfurt the next day will gauge the effect of their July decision to cut the benchmark interest rate to a record low of 0.75 percent.
Prices reduced gains after the Commerce Department reported U.S. gross domestic product rose at a 1.5 percent annual rate in the second quarter from a revised 2 percent gain in the prior quarter. It was the slowest pace of expansion since the third quarter of 2011. The median forecast of economists called for a 1.4 percent increase.
Confidence among U.S. consumers dropped in July to the lowest level this year. The Thomson Reuters/University of Michigan final index of sentiment declined to 72.3 this month from 73.2 in June. The gauge was projected to hold at the preliminary reading of 72.
The cost of the September futures on U.S. light crude oil WTI (Light Sweet Crude Oil) on the NYMEX is now at $ 90.02 a barrel.
September futures price for North Sea Brent crude oil mixture increased to $ 106.21 a barrel on the ICE Futures Europe Exchange.
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