Update:APNewsNow. Updates prices. For global distribution

NEW YORK - The price of oil hovered above US$93 a barrel as a drop in Chinese inflation reinforced expectations for more economic stimulus measures, which could increase demand for crude.

Benchmark oil rose 20 cents to $93.55 per barrel in midday trading in New York. Brent crude gained 67 cents to $112.81 per barrel in London.

China on Thursday said its inflation rate fell further in July, giving the government more room to stimulate growth amid mixed signals about whether the world's second-largest economy is recovering from a painful slowdown.

Crude has surged from below $78 in late June amid hopes that policy-makers in the U.S., Europe and China will soon implement monetary and fiscal stimulus measures to help reverse slowing economic growth.

AP writer Pablo Gorondi contributed to this report.

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