Thursday, February 18, 2010

Oil rises above US$77 a barrel

NEW YORK: Energy prices ticked higher Wednesday after government reports showed gains in U.S. industrial production and new home building.

Benchmark oil for March delivery added 32 cents to settle at US$77.33 a barrel on the New York Mercantile Exchange. Prices rose as high as US$77.82 earlier in the day, the highest in two weeks.

Weak fuel consumption has kept oil and natural gas prices from rising higher during the past few months.

But reports by the Federal Reserve and the Commerce Department suggested that the U.S. may soon increase its appetite for petroleum.

A report on industrial production from the Federal Reserve showed gains in manufacturing, mining and utilities.

It was the first collective increase since August.

The Commerce Department said new home and apartment construction increased in January to the highest level in six months.

However, home construction may not hold at that rate as applications for building permits fell nearly 5 percent.

Uncertainty about the European economy pushed prices in different directions over the past few trading days.

After jumping nearly 4 percent on Tuesday, oil prices have mostly leveled off.

"The market seems to have priced in all the news, and it's waiting for the next story," analyst Phil Flynn said.

In other Nymex trading in March contracts, heating oil increased 1.04 cents to settle at $2.0067 a gallon, and gasoline rose 1.89 cents to settle at $2.0071 a gallon.

Natural gas gained 7.6 cents to settle at $5.386 per 1,000 cubic feet.

In London, Brent crude added 59 cents to settle at $76.27 a barrel on the ICE futures exchange. - AP

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