The price of oil rose slightly on Tuesday, a day after dropping below $90 a barrel for the first time this year, as investors welcomed China's confirmation of its economic growth target and retail sales rose in Europe.
By early afternoon in Europe, benchmark oil for April delivery was up 19 cents to $90.31 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the price fell as low as $89.33 per barrel before finishing at $90.12.
Market confidence recovered after Chinese Premier Wen Jiabao confirmed the country's annual growth target of 7.5 percent while also vowing to favor increased domestic consumption as the main method of economic expansion.
China economy has been one of the key factors driving global demand for crude as growth in the United States and Europe has struggled to gain momentum over the past quarters.
Oil prices were also supported by data showing retail sales in the 17 countries sharing the euro currency grew 1.2 percent in January from the month before, far outpacing market expectations of a 0.2 percent rise.
The data "boosted market confidence and increased risk appetite across the oil market," said a report from Sucden Financial Research in London.
Monday's temporary drop of crude prices to below $90 a barrel was attributed to the introduction in the U.S. of $85 billion in automatic government spending cuts, which could hurt the world's leading economy. The spending cuts kicked in on Friday after President Barack Obama and Congress failed to meet a deadline for striking a deal to avert or soften the reductions. Negotiations on Sunday ended in a bitter impasse.
Looking ahead, oil investors will be watching for signs that a deal to claw back the cuts might be in the works.
They will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending March 1 is expected to show a build of 1.1 million barrels in crude oil stocks and a draw of 1.6 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 54 cents to $110.09 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline added 0.97 cent to $3.108 a gallon.
— Heating oil rose 1.3 cents to $2.932 a gallon.
— Natural gas gained 3.9 cents to $3.568 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.
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