Tags: Oil | Prices

Oil Tops $82; Shakes off Disappointing Reports

Tuesday, 03 Aug 2010 03:43 PM

 

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Oil prices rose above $82 a barrel Tuesday, making for a rare day where energy markets ran opposite to the stock market.

The increase came despite disappointing corporate earnings and consumer spending reports that signaled slower economic growth.

Benchmark crude for September delivery gained $1.21, or 1.5 percent, to settle at $82.55 a barrel on the New York Mercantile Exchange as traders instead took their cue from a weaker dollar.

Motorists got a slight break at the pump, with the national average for a gallon of regular unleaded falling nearly a penny to $2.76, according to AAA, Wright Express and Oil Price Information Service.

The price is about 1.2 cents less than it was a month ago but 17.7 cents more than a year ago. Analysts say prices should increase because of oil's recent run-up from around $76.50 per barrel.

Stocks retreated after consumer products maker Procter & Gamble Co. and Dow Chemical Co. reported sales that were lower than Wall Street expected for the second quarter. Shares of most major oil companies rose.

Also, the Commerce Department said personal spending was unchanged in June, the third consecutive month of lackluster consumer demand. Incomes were flat, while consumers saved more money.

Spending on energy goods and services, which includes electricity, natural gas and gasoline, rose 0.9 percent in June. That compared with a 2.6 percent increase in May.

And, the National Association of Realtors said pending home sales fell last month.

Oil had stuck to a range of $70 to $80 a barrel for most of the summer before it rose above $81 Monday. Despite ample supplies, anemic demand and mixed reports about the recovery, traders apparently bought oil to take advantage of a weaker dollar and low interest rates, Cameron Hanover analyst Peter Beutel said.

Since commodities are priced in dollars, a weaker dollar makes them more attractive to foreign buyers.

"It's a market that is very resilient and it has been shrugging off almost all the bearish news we've been getting," Beutel said.

Investors will be closely watching weekly U.S. crude inventory data on Wednesday and July employment figures Friday.

Analysts expected a drop of 1.2 million barrels in crude inventories, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

U.S. gasoline stocks are expected to decline by 870,000 barrels, while distillate stocks are seen climbing 1.16 million barrels, in line with seasonal tendencies.

In other Nymex trading in September contracts, heating oil rose 4.62 cents to $2.2000 a gallon, gasoline added 2.5 cents to $2.1935 a gallon while natural gas fell 6.2 cents to 4.639 per 1,000 cubic feet.

In London, Brent crude settled up $1.86 at $82.68 a barrel on the ICE Futures exchange.

——

Associated Press writers Alex Kennedy in Singapore and Pablo Gorondi in Hungary contributed to this report.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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