OIL prices rose and settled near US$105 a barrel yesterday after the Commerce Department said the US economy will continue to expand, slowly but steadily.
According to the report, the economy grew at an annual rate of 2.2 percent in the January-March quarter, compared with a 3 percent rate in the final quarter of 2011. But growth is expected to rebound to around 3 percent for all of 2012 as stronger job growth spurs more consumer spending.
Consumer spending is closely watched since it accounts for 70 percent of US economic activity. It accelerated to an annual rate of 2.9 percent in the first quarter.
Benchmark oil rose 38 cents to end at US$104.93 per barrel on the New York Mercantile exchange. Brent crude fell 9 cents to finish at US$119.83 a barrel in London.
Oil prices have hovered between US$102 and US$104 most of this month as traders weigh the impact of Europe's debt crisis, the US recovery and the conflict over Iran's nuclear program against signs of recovery in the US economy.
Some analysts expect US and European economic sanctions against Iran will tighten in the coming months, making it more difficult for the OPEC member to export oil.
Crude has jumped from US$75 in October amid concern a military strike by Israel or the US against Iran's nuclear facilities will disrupt global crude supplies. Six global powers met with Iran earlier this month and another round of negotiations is scheduled for next month.
In other energy trading in New York, battered natural gas prices were getting a bit of a break as cooler spring weather raises expectations that demand may improve.
Natural gas rose 6 cents to finish at US$2.186 per 1,000 cubic feet in yesterday trading. That's up nearly 15 percent from April 19 when the price hit the lowest level in more than a decade at US$1.907 per 1,000 cubic feet.
The price has plunged this year as a natural gas production boom created a glut of supply and demand dropped during a mild winter.
Heating oil lost 1.37 cents to end at US$3.1807 per gallon and gasoline futures rose 2.29 cents to finish at US$3.2062 per gallon
Source:shanghaidaily.com