08/09/2012 12:18 EDT | Updated 10/09/2012 05:12 EDT

Oil gains as lower China inflation adds to hopes for more stimulus

NEW YORK, N.Y. - The price of oil rose a penny Thursday after China said factory production grew at a slower pace in July and retail sales weakened. That's renewing expectations for government action to boost the world's second-biggest economy.

Benchmark oil added one cent to settle at US$93.36 per barrel in New York. Brent crude, which is used to price international varieties of oil, gained $1.08 to $113.22 per barrel in London.

A stronger U.S. dollar on positive U.S. jobs data kept gains for oil in check, however.

China on Thursday said its inflation rate fell further in July, giving the government more room to stimulate growth amid mixed signals about whether the world's second-largest economy is recovering from a painful slowdown.

Crude has surged from below $78 in late June amid hopes that policy-makers in the U.S., Europe and China will soon implement monetary and fiscal stimulus measures to help reverse slowing economic growth.

Other futures prices on the New York Mercantile Exchange:

— Natural gas prices rose after a government report showed a smaller than expected increase in U.S. inventories. Futures rose 1.2 cents to $2.945 per 1,000 cubic feet, although they had gained more than 10 cents earlier.

— Heating oil increased three cents to $3.05 per gallon.

— Gasoline gained two cents to $3.00 a gallon.