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Oil climbs above $95 a barrel in Europe amid hopes of more favorable US economic data
Oil prices climbed above $95 a barrel Tuesday, buoyed by gains in global stock markets and in anticipation of improved U.S. economic data.
By early afternoon in Europe, benchmark crude for January delivery was up $1.44 to $95.32 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 35 cents to settle at $93.88 on Monday.
In London, Brent crude was up $1.78 to $105.42 on the ICE Futures exchange.
Asian stock markets bounced back Tuesday and European ones also gained as concerns eased that the death of North Korean leader Kim Jong Il could spark political turmoil.
Energy analysts Cameron Hanover said Kim's son and successor Kim Jong Un may need up to two years to consolidate his power and is unlikely to take a more militant stance toward the North's longtime rival South Korea.
It said European debt remains the biggest concern in financial markets. On Friday, Moody's downgraded Belgium's credit rating by two notches.
Surveys showing optimism by German businesses and consumers about economic developments over the next months helped consolidate gains by oil prices.
"The softer US dollar supported the strong upside correction in the oil market, as stronger than expected German economic data provided some well-needed support to the European currency that traded above $1.30," said a report from Sucden Financial in London.
A weaker dollar usually boosts crude by making the commodity cheaper ' and a more attractive investment ' for traders holding other currencies.
The euro was up at $1.3075 on Tuesday from $1.3017 late Monday in New York, while the dollar fell to 77.90 yen from 77.95 yen.
Investors also hoped for stronger U.S. housing and gross domestic product figures due out later this week, said Ritterbusch and Associates.
Crude has fallen from above $100 earlier this month on expectations that Europe's debt crisis will trigger a recession on the continent next year and undermine global oil demand.
Markets are also awaiting new figures on U.S. stockpiles of crude and refined products.
Data for the week ending Dec. 16 is expected to show a draw of 2.25 million barrels in crude oil stocks, while gasoline stocks are seen rising by 1.75 million barrels, 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 Wednesday.
In other energy trading on the Nymex, natural gas lost 0.2 cent to $3.094 per 1,000 cubic feet. Heating oil added 3.92 cents to $2.8196 a gallon and gasoline futures were up 3.42 cents to $2.5233 a gallon.
Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.