Oil rises for 4th day, touches $100 a barrel

AP News
Posted: Dec 22, 2011 3:02 PM
Oil rises for 4th day, touches $100 a barrel

Oil prices rose for the fourth day in a row Thursday amid signs of an improving U.S. economy and concerns about global supplies.

The price of benchmark crude rose 86 cents to finish at $99.53 per barrel in New York. At one point in the session it hit $100.05. Brent crude, which is used to price crude produced in many foreign countries and is important for U.S. gasoline producers, rose 18 cents to end at $107.89 per barrel in London.

A series of positive reports in the U.S. suggested that the economy is slowly improving. That has sent stock prices and oil prices higher this week.

Investors got a double-barrel of encouraging news Thursday, as the Labor Department said unemployment claims last week dropped to the lowest level in more than three and a half years, and a private report said leading economic indicators pointed to a strengthening economy.

On Tuesday, a report showed housing construction was picking up in the U.S. And on Wednesday, the Energy Information Administration reported a dramatic drop in the nation's oil supplies last week.

Gasoline demand was down 2.6 percent from last year through the first nine months of the year, according to government data. Drivers cut back amid high pump prices and worries about the economy.

"That's an astonishing amount," said Andrew Lipow, an independent oil analyst. He expects gasoline demand to fall slightly next year, though the decline won't be as great if the economy improves.

Demand for oil and gas grows with the economy as shippers move more goods and consumers drive and fly more.

Oil prices are also being pushed higher by threats to global supplies. Rising tensions between the West and Iran over Iran's nuclear ambitions are raising fears that oil from the world's fourth biggest producer may be kept from reaching markets in the coming weeks.

Oil traders also are concerned about political instability in Kazakhstan, which exports about 1.3 million barrels of oil per day, about 1.5 percent of world demand. The Central Asian nation has been battling political protests that have resulted in more than a dozen deaths in the last month.

Royal Dutch Shell PLC had to shut a large field off the coast of Nigeria because of a leak.

Oil prices have spent much of the year near $100 per barrel. That has pushed the retail price of gasoline to its highest annual average ever, $3.52 per gallon. On Thursday national average pump prices rose a penny to $3.22 per gallon according to AAA, the Oil Price Information Service and Wright Express.

In other energy trading, heating oil was virtually unchanged at $2.9076 per gallon, and gasoline futures rose 2 cents to finish at $2.6398 per gallon. Natural gas rose 1 cent to end at $3.1690 per 1,000 cubic feet.