OIL prices edged higher yesterday as the government said the US economy expanded at a 3-percent annual rate in the fourth quarter.

That's up from a prior estimate of growth of 2.8 percent. Americans also earned more income in the final three months of 2011 than previously reported.

Earlier in the day, oil fell on another report showing a bigger-than-expected increase in US crude supplies. Prices recovered in the afternoon.

West Texas Intermediate, which is used to price oil produced in the US, rose 52 cents, or 0.5 percent, to settle at US$107.07 a barrel on the New York Mercantile Exchange. Traders said the late buying may also be tied to the continued standoff between the West and Iran over that country's nuclear program.

Brent crude, which is used to price international oil, gained US$1.11 to US$122.66 a barrel in London.

The Energy Department said inventories of crude oil rose by 4.2 million barrels last week. Analysts were expecting an increase of just 1 million barrels. The report indicated that demand for oil in the US remains weak.

Meanwhile, retail gasoline prices rose for the 22nd consecutive day to a US average of US$3.73 per gallon. That's 30 cents higher than a month ago and 36 cents higher than the same time last year.

The Energy Department said gasoline supplies shrank by 1.6 million barrels, or 0.7 percent, to 229.9 million barrels. That's 2 percent less than year-ago levels. Analysts expected gasoline supplies to decrease by 180,000 barrels.

Demand for gasoline over the four weeks ended Feb. 24 was 6.7 percent lower than a year earlier, averaging 8.3 million barrels a day.

In other energy trading on the Nymex, gasoline futures were flat at US$3.0423 a gallon. Natural gas futures rose 9.7 cents to settle at US$2.616 per 1,000 cubic feet. Heating oil fell by 3.58 cents to US$3.188 a gallon.

Source:shanghaidaily