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Oil up more than 2 percent with stronger US consumer spending, hope for improving demand
NEW YORK (AP) ' Oil prices rose Monday after the U.S. government said consumers spent more in July, easing concerns about another recession.
It was the latest in a series of reports that indicated the economy improved last month, which could strengthen demand for oil and gasoline.
Benchmark oil rose $1.91, or 2.3 percent, to $87.28 per barrel in midday trading on the New York Mercantile Exchange. Brent crude, used to price international varieties, increased $1.11 to $112.47 per barrel in London.
The Commerce Department said July consumer spending increased by the biggest amount in five months. Consumer spending accounts for 70 percent of the nation's economic activity.
The report is an encouraging sign about the economy despite weak demand for gasoline, PFGBest analyst Phil Flynn said.
Energy analyst Jim Ritterbusch cautioned not to read too much into one report. A batch of economic news is expected this week that could provide a clearer picture of where the U.S. economy is headed ' including unemployment numbers and manufacturing activity.
Most refineries in the Northeast were spared significant damage from Hurricane Irene over the weekend. New York Harbor, a major terminal for oil and gasoline imports, also escaped damage.
ConocoPhillips said one of its refineries in New Jersey was shut down temporarily, and two Sunoco refineries in Pennsylvania were operating at reduced rates.
In other Nymex contracts, heating oil rose 3 cents to $3.0438 per gallon, gasoline futures rose 2 cents to $2.8032 per gallon and natural gas fell 1 cent to $3.902 per 1,000 cubic feet.