Oil price steady after US spending grows weakly

Associated Press |

The price of oil held steady on Friday as poor U.S. economic data raised the prospect of weak growth in energy demand while fears eased that fighting in Iraq would disrupt exports.

Benchmark U.S. crude for August delivery edged 4 cents lower to $105.80 on the New York Mercantile Exchange. The contract slipped 66 cents per barrel to settle at $105.84 on Thursday.

Brent crude, used to price international oils, dipped 1 cent to $113.20 a barrel in London.

U.S. consumer spending in May grew at half the rate that economists expected, in a sign that the rebound in the world's biggest economy — and resulting growth in energy demand — may not be as big as hoped for.

Oil prices were hovering after a sharp drop the day before that analysts said may be a sign investors are starting to expect that the violence in Iraq won't spread to the oil-producing south.

"Although the situation in Iraq remains volatile, last night's decline in oil prices may be an early sign that markets are beginning to position for the likelihood that insurgents will be contained from any further incursions to the south, allowing oil exports to be maintained," said CMC Markets chief analyst Ric Spooner in Sydney.

In other energy futures trading on the Nymex:

— Wholesale gasoline barely budged $3.06 a gallon.

— Natural gas rose 0.9 cent to $4.45 per 1,000 cubic feet.

— Heating oil was little changed at $3.02 a gallon.

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