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Oil hovers near $107 in Asia as signs of improving US economy bolster investor optimism
SINGAPORE (AP) ' Oil prices hovered near $107 a barrel Thursday in Asia as signs of an improving U.S. economy bolstered investor confidence.
Benchmark oil for April delivery was down 10 cents to $106.97 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 52 cents to $107.07 per barrel in New York on Wednesday.
Brent crude rose 8 cents to $122.74 per barrel in London.
The U.S. economy grew 3 percent in the fourth quarter, slightly more than the initial estimate of 2.8 percent. In another report, the Institute for Supply Management-Chicago said manufacturing in the Midwest region rose to a 10-month high in February.
The latest figures reinforce largely positive economic data from the U.S. during the last few months. Better than expected U.S. economic growth and moves by central banks to boost global money supply have helped push crude up to near $110 earlier this week from $75 in October.
Concern that tension over Iran's nuclear program could lead to an armed conflict and crude supply disruptions has also helped keep prices near nine-month highs. The U.S. and Europe are imposing sanctions on Iran while the Middle Eastern country has threatened to cut supplies to some countries and halt oil tankers passing through the Persian Gulf's Strait of Hormuz.
"Rising tensions in the Middle East could easily add another $20 to $40 to oil prices," Bank of America Merrill Lynch said in a report. "A geopolitically prompted supply side shock is ultimately what most investors are concerned about."
In other energy trading, heating oil rose 0.5 cent to $3.21 per gallon and gasoline futures were steady at $3.26 per gallon. Natural gas fell 3.3 cents at $2.58 per 1,000 cubic feet.