Oil rises after new home sales surge
NEW YORK -- Oil prices rose above $84 on Friday, helped slightly by strong sales of new U.S. homes that surged last month from a record low in February.
Worries over Greece's debt crisis and its impact on economic recovery and energy demand kept traders on edge.
Benchmark crude for June delivery rose 73 cents to $84.43 a barrel in midday trading on the New York Mercantile Exchange.
Greece's problems deepened Thursday when Europe's statistics agency found the country's budget deficit last year was larger than previously thought, raising its borrowing costs. Moody's Investor Services downgraded Greece's debt and said more downgrades could be coming.
Greece requested a joint eurozone-International Monetary Fund financial rescue as market pressure pushed the debt-ridden country's borrowing costs to unsustainable levels.
The Commerce Department said that new home sales rose 27 percent in March, rebounding from the previous month's record low and blowing past expectations as better weather and government incentives boosted sales.
The news gave the Dow Jones Industrial Average and energy prices a lift, with the Dow up about 10 points in morning trading.
But there are still few signs that energy demand is picking up, said MF Global analyst Mike Fitzpatrick.
"Acceptance of the idea that a strong sustainable recovery is under way is the foundation of the market's strength, and this is the most tenuous of elements," he said.
With the economy weighed down by unemployment, Fitzpatrick does not see a near-term consumer-driven recovery. While U.S. gasoline prices have been climbing since February as oil rose and refiners geared up for more expensive summer blends, the climb is not as rapid as in years past.
In other Nymex trading in May contracts, heating oil rose 2.20 cents to $2.2370 a gallon and gasoline gained 2.43 cents at $2.3245 a gallon. Natural gas rose 4.3 cents to $4.171 per 1,000 cubic feet.
In London, Brent crude advanced 96 cents to $86.63 on the ICE Futures exchange.