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Oil price rises above $97 per barrel on promising European and US economic news
NEW YORK (AP) ' Oil prices soared on promising economic news out of Europe and the U.S.
Benchmark crude on Tuesday rose $3.24, or 3.5 percent, to $97.29 per barrel in New York. Brent crude, which is used to price foreign oil that's imported by U.S. refineries, rose $2.72, or 2.6 percent, to $106.36 per barrel in London.
Major stock indexes were up more than 2 percent in afternoon trading.
Prices climbed on encouraging news about the global economy. Germany reported that business and consumer confidence rose unexpectedly in December, and Spain's borrowing costs plummeted in a debt auction as the country promised more austerity measures to resolve its debt problems.
In the U.S. retailers said sales jumped last week, while the government reported a surge in apartment construction and building permits in November.
If consumer spending and construction activity continue to grow, demand for oil will likely follow.
Retail gasoline prices fell by less than a penny Tuesday to a national average of $3.21 per gallon, according to AAA, Wright Express and Oil Price Information Service.
A gallon of regular has dropped more than 77 cents since its peak near $4 per gallon this year. Drivers are still paying about 23 cents more per gallon than they did a year ago. The national average in 2011 is expected to be the highest ever at above $3.50 per gallon.
In other energy trading, heating oil rose 6.31 cents to $2.8435 per gallon, and gasoline futures rose 7.50 cents to $2.5641 per gallon. Natural gas was essentially flat at $3.098 per 1,000 cubic feet.