Crude prices continued to rise Thursday as a European energy watchdog said global oil demand will grow this year more than previously expected.
Benchmark crude for March delivery added 76 cents to settle at $75.28 a barrel on the New York Mercantile Exchange. Oil prices have been increasing since Monday.
Experts pointed out, however, that oil is rising despite the U.S. economy. Americans have been consuming smaller and smaller amounts of petroleum for the past month, and demand for heating oil will only fall as Spring approaches and the weather turns milder.
What's helped drive prices higher is economic activity overseas, especially in developing countries like China.
The Paris-based International Energy Agency on Thursday boosted its estimate for global oil demand after taking a closer look at how much fuel developing nations should burn this year. The IEA revised its 2010 demand forecast from 85.3 million barrels daily to 85.5 million barrels.
However, the agency said that oil demand in North America has "virtually stalled" after the recession with the availability of cheaper alternatives like natural gas and coal and better fuel efficiency in passenger vehicles.
If oil continues to rise on foreign consumption, Americans may see their energy prices grow even though they're not using more fuel. So far, however, that hasn't happened.
Retail gasoline prices have been slipping since mid-January. They fell another half penny overnight to a national average of $2.636 a gallon, the lowest point this year, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is now 11.5 cents cheaper than last month, but it's still 69.6 cents more expensive than at the same time last year.
"They'll keep falling," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. "I wouldn't be surprised if we saw gas drop below $2.25 a gallon in the Midwest" in the next few days.
Meanwhile, the Labor Department said first-time claims for jobless benefits dropped by 43,000 to a seasonally adjusted 440,000. The report raised hopes that the economy may add jobs soon and increase demand for oil and gasoline.
Oil continued to rise even after a blizzard dumped more than a foot of snow along parts of the East Coast. The weather grounded thousands of commercial flights and forced motorists in numerous cities to work from home.
Wednesday's storm smothered Baltimore in over 19 inches, Washington in 10 inches and 16 inches in Philadelphia. New York City was covered with 10 to 16 inches.
The storm forced Continental to cancel at least 900 flights on Wednesday. United and Southwest canceled 600 apiece and American scrubbed hundreds of flights as well.
In other Nymex trading in March contracts, heating oil rose 1.67 cents to $1.9636 a gallon, and gasoline added 0.88 cent at $1.9378 a gallon. Natural gas gained 7.7 cents at $5.369 per 1,000 cubic feet.
In London, Brent crude increased 61 cents to $73.15 a barrel on the ICE futures exchange.
Associated Press writers David Koenig in Dallas, Mae Anderson in New York, Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.
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