Oil rebounded in New York on signs that central banks from Europe to China may ease monetary policy to spur economic growth and speculation sanctions against Iran will curb supply.
Futures gained as much as 1.1 percent, reversing earlier losses. The European Central Bank is forecast to cut interest rates this week to help curb the debt crisis, while a state- owned newspaper in China said the time is right to increase liquidity in the banking sector. An embargo targeting Iranian oil exports will probably have a bigger affect than previously estimated, according to Goldman Sachs Group Inc.
“It’s getting to a point, I think, that the bad numbers become a good thing for the market because we believe that there will be some action for stimulus,” Carl Larry, the president of Oil Outlooks & Opinions LLC in New York, said in a Bloomberg Television interview. He forecast that New York crude will average $92 to $94 a barrel this year.
Oil for August delivery climbed as much as 88 cents to $84.63 a barrel and was at $84.45 in electronic trading on the New York Mercantile Exchange at 4:14 p.m. in Sydney. The contract slid $1.21 yesterday to $83.75, the lowest close since June 28.