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updated: 9/6/2012 6:24 AM

Oil price rises ahead of key European bank meeting

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  • Protesters march to the Department of Energy building at suburban Taguig city, east of Manila Thursday Sept. 6, 2012. The protesters are against the Independent Oil Price Review Committee report allegedly concluding that "oil companies are not overpricing the public and gaining excessive profits from consumers. The oil companies have been steadily raising oil prices due to situations in the world market.

      Protesters march to the Department of Energy building at suburban Taguig city, east of Manila Thursday Sept. 6, 2012. The protesters are against the Independent Oil Price Review Committee report allegedly concluding that "oil companies are not overpricing the public and gaining excessive profits from consumers. The oil companies have been steadily raising oil prices due to situations in the world market.
    Associated Press

 
Associated Press

BANGKOK -- Oil prices rose Thursday ahead of a meeting of European central bankers who are expected to announce a plan to help financially strapped countries.

The European Central Bank is expected to announce a bond-buying program to reduce high borrowing costs in Spain and Italy. That could lower their chances of needing an emergency bailout, ease concerns about their economies and translate into growth and more demand for energy.

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Benchmark crude for October delivery was up $1.09 to $96.45 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 6 cents to end at $95.36 per barrel in New York on Wednesday. Brent crude was $1.11 higher at $114.20.

Manufacturing weakness in China and the U.S. has sparked fears of a global economic slowdown. But such concerns are being countered by pledges of action by central banks and governments to promote global economic growth.

Expectations for ECB action have been high since the bank's president, Mario Draghi, said in July that the bank will do whatever it takes to save the euro currency.

Carl Larry, president of Oil Outlooks and Opinions, said he believes crude was at the right price.

"WTI (West Texas Intermediate crude) has not just struggled to get over $100 it has struggled to get back under $90 ... perhaps WTI is right where it should be at $95."

In other energy futures trading, heating oil rose 3 cents to $3.15 per gallon. Wholesale gasoline rose 3 cents to $2.98 per gallon. Natural gas fell 1 cent to $2.784 per 1,000 cubic feet.

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