Oil rises on US supply, economic data

AP News
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Posted: Sep 05, 2013 1:51 PM

NEW YORK (AP) — Prices for crude oil and natural gas moved in opposite directions after the U.S. government issued weekly supply reports for both fuels.

Benchmark oil for October delivery was up 87 cents, or 0.8 percent, to $108.10 a barrel in afternoon trading on the New York Mercantile Exchange. But natural gas futures fell 9 cents, or 2.4 percent, to $3.59 per 1,000 cubic feet

As the market waited to see if Congress will approve a U.S. military strike against Syria, the main focus was on market fundamentals and the release of U.S. economic data.

Oil was showing a slight gain in the morning but rose further after the government said that supplies of oil and gasoline each fell by 1.8 million barrels in the week ended Aug. 30. The drop in gasoline supplies was greater than expected, and refinery usage increased, both signs perhaps of solid demand for fuel at the end of the summer driving season.

On the economic front, the Labor Department released data Thursday showing applications for U.S. unemployment benefits fell to 323,000 last week, near their lowest level in 5 years and in line with trends indicating fewer layoffs and steady net job gains.

Elsewhere in the oil market, Brent, the benchmark for international crudes, was up 14 cents to $115.05 a barrel on the ICE Futures exchange in London. Brent has risen sharply recently due to fears of a U.S. intervention in Syria, even if the scale of the attack is now expected to be low.

Natural gas dropped after the Energy Department said supplies rose by 58 billion cubic feet to 3.188 trillion cubic feet. That was a bigger increase than expected and comes as the summer cooling season draws to a close.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 4 cents to $2.83 per gallon.

— Heating oil was flat at $3.14 per gallon.

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Pamela Sampson in Bangkok, Pablo Gorondi in Budapest and Christopher S. Rugaber in Washington contributed to this report.