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Rise in US oil demand lifts prices above $90 a barrel for the first time since May
BANGKOK (AP) ¯¯¯ Oil rose above $90 a barrel in Asia for the first time since May after the U.S. government said oil demand is on the rise and regional stock markets rebounded on strong earnings and improved U.S. economic data.
Benchmark crude was up 47 cents at $90.34 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 65 cents to settle at $89.87 per barrel in New York on Wednesday. Brent crude was up 76 cents at $105.92 a barrel on the ICE futures exchange in London.
The Energy Information Administration reported that average oil demand increased last week in the U.S. for the third week in a row. Oil demand had been down most of the year, when compared with 2011, as manufacturing activity slowed and drivers cut back on travel.
EIA's weekly petroleum report also noted a surprise drop in gasoline supplies last week as refineries pulled back on production. Oil supplies also fell, though the drop was less than what analysts expected.
Oil is likely to remain near $90 in the near term due to the signs of improving demand in the EIA report, energy analysts at the The Schork Group said in a report.
Also helping sentiment in the oil market were gains in Asian stock markets after strong earnings from IBM and Ebay and a Commerce Department report that U.S. home builders broke ground last month on the most homes and apartments in nearly four years.
In other futures trading, heating oil was up 0.8 cent to $2.885 a gallon and gasoline added 0.7 cent to $2.782 a gallon. Natural gas fell 1.8 cent to $2.955 per 1,000 cubic feet.
AP Energy Writer Chris Kahn contributed.