OIL prices rose yesterday on promising economic news out of Europe and expectations that a supply glut will ease in the US Midwest.

Benchmark West Texas Intermediate crude rose by US$1.27 to end the day at US$104.20 per barrel.

News from two key European economies signaled that oil demand won't weaken. A closely watched survey in Germany showed that investor sentiment unexpectedly rose for a fifth straight month. Spain, which has been struggling with massive government debts, also raised more cash from a bond sale than expected, signaling improving confidence in that country's finances.

Europe consumes about 18 percent of the world's oil.

In the US, the price of benchmark WTI climbed in anticipation of a pipeline that's expected to carry oil out of the oversupplied Midwest. The government said on Friday that the Seaway Pipeline will soon begin moving oil from Cushing, Oklahoma, to the US Gulf, where it can be shipped elsewhere.

Positive signs also emerged in the US economy. Stocks rose following robust quarterly profits from Coca-Cola and other big companies. A stronger economy typically increases demand for energy.

Brent crude, used to set the price of oil imported by US refineries, increased by 10 cents to end at US$118.78 per barrel.

In other energy trading, natural gas futures hit a new 10-year low. The contract lost 6.5 cents to end at US$1.951 per 1,000 cubic feet. Heating oil added a penny to finish at US$3.1266 per gallon and gasoline futures gave up 3.3 cents to finish at US$3.234 per gallon

Source:shanghaidaily.com