Oil tops $100 for first time since early June

AP News
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Posted: Jul 21, 2011 3:14 PM
Oil tops $100 for first time since early June

Oil topped $100 per barrel on Thursday for the first time since early June on an improving outlook for the U.S. economy, and European leaders moved closer to agreement on more financial aid for Greece.

The Conference Board said its index of leading economic indicators rose 0.3 percent in June. The increase suggested the economy won't fall back into a recession over the next few months, even with high unemployment and a weak housing market.

Officials in Europe prepared a new rescue package for Greece at an emergency summit in Brussels. The move strengthened the euro relative to the dollar. Oil, which is priced in dollars, tends to rise as the dollar weakens and makes crude cheaper for investors holding foreign currencies.

"We're getting some good news again," independent oil analyst Jim Ritterbusch said. "When that happens, commodities start to look attractive."

Benchmark West Texas Intermediate crude for August delivery rose 73 cents to settle at $99.13 per barrel on the New York Mercantile Exchange. It reached $100.16 earlier in the day. Brent crude, which is used to price many international varieties, fell 64 cents to settle at $117.51 per barrel on the ICE Futures exchange.

Retail gasoline continued to climb. The national average is now $3.689 per gallon, according to AAA, Wright Express and Oil Price Information Service.

Meanwhile, the International Energy Agency said it may release more oil to hold off future oil price spikes. The IEA, which announced plans last month to dump millions of barrels onto the market, said it "stands ready" to add more if needed.

On June 23 the IEA said it will release 60 million barrels of oil, mostly from the U.S. Strategic Petroleum Reserve, to make up for 1.5 million barrels of daily exports lost after Libya was engulfed in an anti-government rebellion that started in February.

Since the IEA announcement, the price of benchmark crude has increased nearly 5 percent and pump prices have risen 2 percent.

The Energy Information Administration also reported Thursday that natural gas supplies grew last week to 2.67 trillion cubic feet. That's about what analysts expected.

In other Nymex trading for August contracts, heating oil lost 1.92 cents to settle at $3.0992 per gallon and gasoline futures lost 4.75 cents to settle at $3.0995 per gallon. Natural gas dropped 10.7 cents to settle at $4.362 per 1,000 cubic feet.

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Chris Kahn can be reached at www.twitter.com/ChrisKahnAP.