Tags: Oil | Prices

Oil Prices Rise on Signs of Improving Economy

Thursday, 29 Jul 2010 02:10 PM

Oil prices rose Thursday as better-than-expected earnings from Exxon Mobil Corp., Southwest Airlines Co. and others bolstered hope for an improving economy.

Gas pump prices across the country on Thursday averaged $2.744 for a gallon of regular unleaded gasoline, according to AAA, Wright Express and Oil Price Information Service. That's 2.6 cents more than a week ago and 23.3 cents above a year ago.

Benchmark crude for September delivery rose $1.07 to $78.06 a barrel in midday trading on the New York Mercantile Exchange.

Crude also benefited from a slight decline in new unemployment claims and a weaker dollar. Commodities like oil are priced in dollars. A weaker dollar makes commodities more attractive to buyers holding foreign currency.

Oil traders have been closely watching the movement of the dollar, stock markets, earnings and economic data for clues about investor sentiment and the strength of the U.S. and global economies.

In a research report Barclays Capital said the main driver of oil prices has been skittishness about the economic recovery. "It may take a while before the ghosts from the previous crisis go away entirely," it wrote.

Exxon Mobil Corp.'s second-quarter income nearly doubled to $7.56 billion as oil prices increased from last year. It was Exxon's highest quarterly profit since the $7.82 billion it earned in the last three months of 2008.

Southwest Airlines reported second-quarter earnings of $112 million and credited a 21 percent increase in revenue to higher average fares.

In other energy trading, natural gas rose as the government said reserves grew by 28 billion cubic feet to 2.919 trillion cubic feet last week. Supplies remain about 9 percent above the five-year average.

Analysts say the increase in reserves was less than what is typical this time of year. A heat wave that has Americans resorting to air conditioners to stay cool is forcing power companies to burn more gas to generate electricity. Reduced production in the Gulf of Mexico last week due to Tropical Storm Bonnie also slowed the expansion of natural gas reserves.

Natural gas for September delivery rose 5.2 cents to $4.770 per 1,000 cubic feet.

In other Nymex trading, heating oil for August delivery rose 3.54 cents to $2.0318 a gallon. Because that contract expires on Friday, much of the trading has moved to the September contract, where the price gained 3.56 cents at $2.0616 a gallon.

The August contract for gasoline, which also expires Friday, rose 2.25 cents at $2.0859 a gallon. The September contract rose 2.82 cents to $2.0929 a gallon.

Brent crude was up $1.22 to $77.28 a barrel on the ICE futures exchange.

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Oil prices rose Thursday as better-than-expected earnings from Exxon Mobil Corp., Southwest Airlines Co. and others bolstered hope for an improving economy.Gas pump prices across the country on Thursday averaged $2.744 for a gallon of regular unleaded gasoline, according to...
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2010-10-29
Thursday, 29 Jul 2010 02:10 PM
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