Oil above $64 amid upbeat corporate earnings
LONDON — Oil prices rose above $64 a barrel Thursday as upbeat corporate earnings suggested the global economy is slowly recovering, though inventories data showed U.S. crude demand remains weak.
Benchmark crude for September delivery was up 92 cents to $64.27 a barrel by early afternoon European time in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell $3.88 to settle at $63.35.
Investor sentiment improved after several big companies in Asia and Europe reported good earnings.
In Japan, carmakers Nissan Motor Co. and Honda Motor Co. jumped 11.1 percent and 8.2 percent on strong profits. In Europe, BT Group PLC rose 12.7 percent and its French peer Alcatel-Lucent SA rose 7.7 percent after they also unveiled better than expected second-quarter earnings.
Crude prices have recently been tracking stock markets, but slid from above $69 earlier this week on investor concerns that demand in the U.S. will remain weak despite some economic improvements.
More evidence emerged on Wednesday that drivers may be cutting back on gasoline consumption when the Energy Information Administration said crude supplies in the U.S. grew by 5.1 million barrels last week, or about 18 percent above last year’s levels.
“U.S. demand remains weak, with little prospect for demand growth, and inventories are at historically high levels,” said David Donora, executive director of commodities for London-based Threadneedle, which manages about $80 billion of assets.
Investors are also seeing signs that the U.S. economy may struggle the rest of the year. On Wednesday, the government reported that orders to factories in June for big-ticket durable goods plunged by 2.5 percent, the largest drop in five months and bigger than analysts expected.
In other Nymex trading, gasoline for August delivery rose 2.3 cents to $1.88 a gallon and heating oil rose 4 cents to $1.71. Natural gas for September delivery rose 3.4 cents to $3.58 per 1,000 cubic feet.
In London, Brent prices rose $1.41 to $67.94 a barrel on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.
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