Oil rises as U.S. imports jump
NEW YORK -- Oil prices rose Wednesday as the government reported that Americans were regaining their appetite for imported goods and a European energy watchdog said demand for crude this year may not be as weak as once thought.
Benchmark crude for September delivery climbed $1.38 to $70.82 a barrel on the New York Mercantile Exchange. In London, Brent prices added 80 cents to $73.26 a barrel on the ICE Futures exchange.
Prices jumped in morning trading after the government said the U.S. trade deficit increased slightly in June. The Commerce Department reported that imports rose for the first time in 11 months -- another indication that the recession may be fading.
The reports from both sides of the Atlantic were enough to offset news that crude supplies continue to grow.
The U.S. Energy Information Administration said oil placed into storage rose for the third straight week.
Gas prices are certainly much lower than they were last year, but the bulging supplies of crude haven't resulted steadily decreasing gas prices.
Refiners continue to cut back on production, which has kept gasoline prices relatively stable for the past month or so.
U.S. pump prices added two-tenths of a penny overnight to a new national average of $2.645 a gallon (70 cents a liter). A gallon of regular unleaded is still $1.154 (31 cents) cheaper than the same time last year.
While prices have risen slowly for three weeks, prices at the pump are about where they were at the end of June.
Given the economy in the U.S. and Europe, prices might have fallen further if not for China.
Earlier in the day, the International Energy Agency said Chinese energy consumption would push the overall global crude demand higher despite continued weakness in Europe and North America.
How China does during the global economic downturn has effected energy prices for the rest of the globe. The country imported a record 4.6 million barrels of fuel a day last month.
It is that purchasing power that helped change the forecast for the Paris-based IEA, which added 70,000 barrels a day to its 2010 forecast of global oil demand. The new prediction of 85.3 million barrels a day is a 1.6 percent increase over this year. The IEA also increased its 2009 forecast by 190,000 barrels a day to 83.9 million barrels a day, but noted this is still 2.7 percent lower than 2008.
Both OPEC and the U.S. Energy Department's Energy Information Administration were more downbeat. The EIA on Tuesday said global crude demand will likely fall by 1.71 million barrels this year, more than its previous forecast of a drop of 1.56 million barrels.
And the Organization of Petroleum Exporting Countries said it expects consumption to slide by 1.65 million barrels a day this year, before rising next year.
In other Nymex trading, gasoline for September delivery added less than a penny to $2.045 a gallon and heating oil gave up less than a penny to $1.9099 a gallon. Natural gas for September delivery also lost less than a penny to fetch $3.532 per 1,000 cubic feet.