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1st LD Writethru: Oil prices surge despite downbeat economic data

Xinhua, January 31, 2015 Adjust font size:

Oil prices jumped Friday despite discouraging U.S. economic data as traders expected that low prices will slow production.

The U.S. government announced the economy of the top global consuming country grew sharply lower in the final quarter of 2014.

The U.S. real gross domestic product (GDP), the main gauge of a country's economy, expanded at an annual rate of 2.6 percent in the fourth quarter of 2014, below market expectation, said the Commerce Department Friday.

The economy grew 5 percent in the third quarter and 4.6 percent in the second quarter after contracting in the first three months of the year. In whole 2014, the economy expanded 2.4 percent, slightly higher than the 2.2 percent growth in 2013.

However, oil prices rebounded strongly as signs showed that low prices slowed U.S. oil companies drilling activities. Data from service company Baker Hughes showed the number of rigs drilling for oil in the United States fell by 7 percent this week.

Resource company BHP Billiton Ltd announced last week that it would reduce the number of operating rigs in United States to 16 from 26 by July.

Light, sweet crude for March delivery gained 3.71 U.S. dollars to settle at 48.24 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery moved up 3.86 dollars to close at 52.99 dollars a barrel. Endite