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Oil prices surge back past $100 a barrel as traders stay bullish despite US economic worries

Oil prices surge back past $100 a barrel as traders stay bullish despite US economic worries

Oil futures surged back above $100 a barrel Tuesday as traders took their cue from supply concerns and stock market bulls rather than signs that the U.S. economy remains shaky.
Crossing the psychologically significant hurdle once again _ oil prices last topped $100 last week _ may have helped fuel the rally by triggering automatic computer programs set to buy at certain levels and enticing fresh speculators into the market, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois.
"You see additional buying among people who think they're missing something," he said. "Any time you move above ($100 a barrel), you're going to ignite some fresh buying."
Investors who recently were selling on weak economic data seemed to take in stride news from the Conference Board, a business-backed research group, that its Consumer Confidence Index fell to 75.0 this month from a revised 87.3 in January. The reading was the lowest since February 2003, and was far below what analysts had been expecting; it indicated that consumers might continue to curb their spending in the coming months.
Meanwhile, the Labor Department reported that wholesale inflation jumped by 1 percent in January, more than twice what analysts had been forecasting. That report, coupled with the consumer confidence index, pointed to an economy that is slowing even as prices are rising.
But traders in both the energy market and the stock market, which also advanced, seemed unfazed.
Light, sweet crude for April delivery jumped $1.67 to $100.90 a barrel on the New York Mercantile Exchange.
"We're seeing a solid tone to the stock market," Ritterbusch said. "I think the oil market is using the stock market as a proxy for future economic activity."
Also supporting prices were concerns about supply disruptions from unrest in Iraq, a major oil exporter, and warnings by Iran against further international sanctions. Turkish ground forces pushed their offensive against Kurdish rebels deeper into the north of Iraq, seizing seven guerrilla camps, officials said.
The increases came despite expectations that a government report due out Wednesday will show U.S. crude stocks rose for the seventh week in a row.
But oil has risen in recent days amid an increase in speculative buying. Some traders believe that global demand will be high enough to support higher crude prices even if the U.S. economy is slowing. Last week, March oil rallied to a new settlement record of $100.74 and a new trading record of $101.32 before expiring.
In other Nymex trading Tuesday, heating oil futures gained 2 cents to trade at $2.8119 a gallon, after settling at a record $2.7853 a gallon Monday. Gasoline prices were nearly flat at $2.55 a gallon.
The government inventories report is expected to show supplies of distillates, which include heating oil and diesel, fell last week. Cold weather across the U.S. Midwest and Northeast has also helped push heating oil prices higher.
The report by the U.S. Energy Department's Energy Information Administration is tipped to say that stocks of distillates fell 2 million barrels for the week ended Feb. 22, according to a Dow Jones Newswires poll of analysts. Vienna's JBC Energy, in its daily newsletter said the expected drop in distillates is anticipated "despite an expected increase in (U.S.) refinery runs."
The EIA report is also expected to show that crude oil stocks rose last week by 2.6 million barrels, which would be the seventh straight week of gains. Gasoline inventories are tipped to rise by 300,000 barrels.
Natural gas futures jumped 6.8 cents to $9.254 per 1,000 cubic feet after Gazprom, Russia's natural gas monopoly, again threatened to cut supplies to neighboring Ukraine, according to Russian news agency reports.
In London, Brent crude futures rose $1.81 to sell for $99.50 a barrel on the ICE Futures exchange.
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AP Business Writer George Jahn in Vienna, Austria contributed to this report.


Updated : 2021-03-04 10:35 GMT+08:00