Oil Rises To Near $100 Amid Improving US Economy

By Salon Staff

Published December 23, 2011 6:00AM (EST)

SINGAPORE (AP) — Oil prices closed in on $100 a barrel Friday in Asia amid signs an improving U.S. economy will boost demand for crude.

Benchmark crude for February delivery was up 40 cents to $99.93 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to finish at $99.53 on Thursday.

In London, Brent crude was steady at $107.89 on the ICE futures exchange.

Crude has jumped from below $93 earlier this week on evidence of a slow but steady improvement in the U.S. economy.

The number of people applying for unemployment benefits dropped last week to the lowest level since April 2008, the third week in a row that applications fell. The Conference Board reported that its measure of future economic activity jumped last month, the second straight gain.

"This is a market that just appears to want to go higher," energy consultant and trader The Schork Group said in a report. "All good positive economic headlines are hyped and all poor headlines are ignored. Bears seem unable to keep crude from finishing 2011 below $100."

The market is also primed for potential threats to global crude supplies, such as rising tensions between Iran and Western nations over Iran's nuclear power program. The U.S. and Europe may bolster sanctions against the world's fourth crude biggest producer.

"Iran might not passively wait for sanctions to be applied and could act unilaterally to embargo supplies," J.P Morgan said in a report. "We are also concerned about Iraq, where political uncertainties seem to be rising following the U.S. troop pullout."

"We expect Iraq to add about 500,000 barrels a day of new supply in both 2012 and 2013, and any deviation from its present course could have serious implications for global supply."

Trading volume is normally low during the next week as many traders take vacations around the Christmas and New Year's Day holidays.

In other energy trading on the Nymex, natural gas fell 2.6 cents to $3.14 per 1,000 cubic feet. Heating oil rose 0.5 cent to $2.92 a gallon and gasoline futures were up 1.2 cents to $2.65 a gallon.

Salon Staff

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