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Oil rises slightly to near $107 in Asia amid mixed signs about US economy
SINGAPORE (AP) ' Oil prices rose slightly to near $107 a barrel Monday in Asia amid mixed signs about U.S. economic strength.
Benchmark oil for April delivery was up 34 cents to $107.40 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.95 to settle at $107.06 per barrel in New York on Friday.
Brent crude for May delivery was up 11 cents at $125.92 per barrel in London.
On Friday, the University of Michigan said its consumer sentiment index for last month was below analysts' expectations, driven by worries about gasoline prices, which soared 6 percent in February.
Higher gasoline prices could crimp the U.S. economy by shrinking the amount of money that people have to spend. Gasoline is currently selling for an average of $3.83 per gallon ($1 a liter) in the U.S., 31 cents more than a month ago.
Crude has jumped from $75 in October as signs of an improving U.S. economy ' led by growing employment, retail sales and industrial production ' bolstered investor confidence.
International Monetary Fund Managing Director Christine Lagarde said Sunday that the global economy had "stepped back from the brink" in recent months and there was reason for more optimism about growth.
Traders were also eyeing a possible release of strategic crude reserves by the U.S. and Britain. Reports came out Thursday that an agreement to release reserves had been reached but U.S. officials quickly denied the stories.
The release of crude would likely be a measure aimed at lowering prices, but traders are also wondering if it would be designed to replace Iranian production in the event of a military strike against that country's nuclear facilities or tighter economic sanctions.
"The reserves headlines unnerved as much of the oil market as it calmed, in particular by creating an impression in some areas that talk of a release might be pre-emptive actions against Iran rather than primarily a response to current prices," Barclays Capital said in a report "Even in the event of a release, the effect on prices will be limited."
In other energy trading, heating oil was steady at $3.29 per gallon and gasoline futures gained 0.7 cent to $3.36 per gallon. Natural gas slid 0.2 cent to $2.33 per 1,000 cubic feet.