Oil advanced, extending a weekly gain, as investors speculated that China’s government will boost stimulus measures and the U.S. tightened sanctions on Iran. Crude futures rose as much as 0.9 percent in New York after closing 0.3 percent higher yesterday. China’s economy grew at a less-than-estimated 7.6 percent in the second quarter, data from the National Bureau of Statistics showed. Oil in New York closed at a one-week high yesterday after the U.S. announced some additional sanctions on Iran. “Oil looks a little firmer after Chinese GDP this morning wasn’t any worse than feared,� said Michael Hewson, a London- based analyst at CMC Markets U.K. Plc. “Expectations of further stimulus from Chinese authorities are driving prices for now, however unless demand picks up then prices look likely to remain capped.� Crude for August delivery added as much as 79 cents to $86.87 a barrel on the New York Mercantile Exchange and was at $86.81 at 11:29 a.m. London time. The contract rose 27 cents yesterday to $86.08, the highest close since July 5. Prices are up 2.8 percent this week and 13 percent lower this year. Brent oil for August settlement on the London-based ICE Futures Europe exchange traded at $102.11 a barrel, up $1.04. The European benchmark crude’s premium to the New York-traded West Texas Intermediate grade was at $15.30. The spread was $14.99 yesterday, the widest in a month based on closing prices. Economic Slowdown Oil may fall next week on concern that weaker economic growth will reduce fuel demand, a Bloomberg News survey showed. Fourteen of 34 analysts and traders, or 41 percent, forecast crude will drop through July 20. Twelve respondents, or 35 percent, predicted futures will rise and eight said there will be little change. Prices may also extend losses as the 100-day moving average has almost fallen to the 200-day mean, signaling a potential “death cross� chart formation, according to data compiled by Bloomberg. The same pattern is seen for New York crude and Brent. Investors typically sell contracts when a shorter moving average falls below a longer one. China’s economy slowed to the weakest pace since the first three months of 2009, according to the statistics bureau. Oil refineries in the country processed 8.79 million barrels a day of crude in June, down 3.4 percent from May and the lowest level in eight months, separate data from the bureau showed. China is the world’s second-biggest consumer of crude. Italian Bonds Italian 10-year bonds fell earlier today after Moody’s Investors Service lowered the government bond rating to Baa2 from A3 and said further downgrading is possible. That’s two levels above junk and one above Spain, a further deterioration in Europe’s sovereign debt situation. Later in the morning, Italy sold 5.25 billion euros of bonds maturing between 2015 and 2023. The auction was “fairly positive and the yields were always going to be a little lower than previous auctions,� Hewson said. “Overall yields are still way too high.� The U.S. will target the National Iranian Tanker Co., 20 financial institutions and four “front companies� in Hong Kong, Malaysia, Dubai and Switzerland that it said are being used to evade international sanctions on the Persian Gulf nation’s oil trade, according to a Treasury Department statement. A European Union embargo on purchases of Iranian oil came into full effect on July 1. U.S. officials said the intent is to encourage foreign companies to cease oil-related business with Iran until it meets international demands to abandon parts of its nuclear program. Iran pumped crude in June at close to the slowest rate in 22 years, the International Energy Agency said yesterday. To contact the reporter on this story: Sherry Su in London at lsu23@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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