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updated: 8/14/2012 7:35 AM

Oil prices up ahead of US retail sales data

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Associated Press

The price of oil inched up above $93 a barrel as the market looked ahead to the release of data on U.S. oil stockpiles and retail sales later Tuesday.

By early afternoon in Europe, benchmark oil was up 32 cents to $93.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 14 cents to close at $92.73 in New York on Monday.

In London, Brent crude was up 47 cents to $114.07 a barrel on the ICE Futures exchange.

Brent is being pushed to near four-month highs due mostly to lower production in the North Sea and the intensifying conflicts in the Middle East.

"In recent days, rhetoric between Iran and Israel has significantly intensified, fuelling fears of a military conflict," said a report from Commerzbank in Frankfurt. "Egypt has now become another flashpoint in the region, the newly elected president having replaced the army leadership and the defense minister of this most populous Arab country -- which is also an important oil transit country because of the Suez Canal."

The release of retail sales data in the U.S. may give some indication of which way oil prices might go. Growth in retail sales would be a sign that energy demand may be on the way up, along with oil prices.

Oil analyst and trader Stephen Schork said that "all eyes will likely rest on domestic retail sales data," which fell 0.5 percent in June but is expected to rise 0.3 percent in July.

Meanwhile, the International Energy Agency last week cut its global oil demand forecast for this year and next, citing "a weak economic backdrop." On Tuesday, it was revealed that the European Union's economy contracted by a quarterly 0.2 percent in April-June, even as Germany, its largest economy, grew by 0.3 percent in the same period.

Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.

Data for the week ending Aug. 10 is expected to show draws of 1.5 million barrels in crude oil stocks and 2.3 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration -- the market benchmark -- will be out on Wednesday.

In other Nymex futures trading, heating oil rose 1.73 cents to $3.0356 per gallon, while gasoline futures added 0.74 cent to $2.9981 per gallon. Natural gas was up 1.7 cents to $2.746 per 1,000 cubic feet.

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