Oil above $88 amid improving US economic signs

AP News
Posted: Oct 17, 2011 4:15 AM
Oil above $88 amid improving US economic signs

Oil prices rose above $88 a barrel Monday in Asia, extending a two-week rally as improved U.S. retail sales added to hopes that the world's biggest economy will avoid a recession this year.

Benchmark crude for November delivery was up $1.26 at $88.06 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.57 to settle at $86.80 in New York on Friday.

Brent crude was up 46 cents at $112.69 a barrel on the ICE Futures Exchange in London.

The U.S. government reported Friday that retail sales rose 1.1 percent in September, the biggest gain in seven months.

"The retail sales report was encouraging for both the energy market and the health of the general economy," energy trader and consultant The Schork Group said in a report. "Now let's see how long this lasts until European debt concerns send us reeling again."

Crude has jumped about 17 percent from $75 earlier this month amid growing optimism that European leaders will unveil a convincing plan next week to contain the region's debt crisis.

Traders will also be closely watching a slew of corporate earnings announcements this week, including banks Citigroup and Wells Fargo later Monday and Coca-Cola, Apple and Bank of America on Tuesday.

In other Nymex trading, heating oil rose 3.6 cents to $3.08 per gallon and gasoline futures gained 3.1 cents to $2.80 per gallon. Natural gas added 3.7 cents to $3.74 per 1,000 cubic feet.