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Monday, February 24, 2014

Oil prices rise as U.S. stock markets rose

Oil prices rise as U.S. stock markets rose

Oil prices rose on Monday (Tuesday morning GMT), as the U.S. stock market rallied and traders believe that the economy can withstand a reduction in Federal Reserve stimulus.

Light sweet crude for April delivery rose 62 cents to settle at 102.82 dollars a barrel on the New York Mercantile Exchange, Xinhua reported.

World oil prices rebound (rebound) from earlier losses on Monday, as traders see supply concerns and digest the weekend meeting of 20 major world economies.

New York's main contract, light sweet crude or West Texas Intermediate (WTI) for delivery in April, rose 1.12 dollars to 103.32 dollars per barrel, AFP reported.

Brent North Sea crude for April delivery rose 73 cents to 110.58 dollars per barrel in late afternoon London trade.

"Oil prices start the new trading week with a slight advantage," said Commerzbank analyst Carsten Fritsch.

"The risks of supply due to ongoing production stoppage in Libya, fighting in South Sudan and unrest in Venezuela, not to mention the low stock levels at the refinery on both sides of the Atlantic, providing support for the price."

While crude oil futures pulled lower in early dealings Monday amid cold weather in the United States.

The market also examine the results of the Group of 20 (G20) in Sydney on Sunday.

Finance ministers and central bank governors of the G20 countries, which accounted for 85 percent of the world economy, issued a statement to push the "return to growth strong, sustainable and balanced global economy".

International Monetary Fund (IMF) said the strategy would add half a percentage point to annual global growth for four years starting next year.

The current IMF projected global growth of 3.7 percent this year and 3.9 percent in 2015.

"The G20 promised two percent growth (percentage points) over a period of five years has provided some positive sentiment towards growth in the medium term," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

"Target growth, which also reflects two trillion dollars in terms of real value, will support the price of oil," he said, noting the G20 shift away from savings as the economic recovery takes hold.

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