Benchmark Oil Price Rises Above $102 Per Barrel
NEW YORK (AP) — Oil prices climbed Tuesday on expectations that China's economy — and its appetite for petroleum — will continue to grow in 2012.
Benchmark crude rose by $1.51 to $102.82 per barrel in New York. Brent crude, used to price foreign oil varieties that are imported by U.S. refineries, increased by $1.15 to $113.60 per barrel in London.
Prices climbed after China said oil imports grew 6 percent in December, when compared to a year earlier. China is the world's second biggest oil consumer behind the U.S. Strong demand for oil in China will likely help support higher global crude prices in 2012.
Manufacturers are looking to China and other emerging economies for strong growth this year. Aluminum maker Alcoa on Monday was the first major U.S. company to report fourth-quarter earnings. Although it posted a loss, Alcoa offered a bullish outlook for the year, expecting strong demand from China.
Stocks rose on hopeful signs for the global economy. Major indexes were up about 1 percent in midday trading.
Energy commodities and stock markets are "being turbo charged by U.S. economic optimism," independent analyst Jim Ritterbusch said.
Investors were also reassured about measures to address Europe's debt problems after credit ratings agency Fitch Ratings said it won't downgrade France this year. A downgrade would have made it more expensive for France to raise cash to deal with the crisis.
U.S. gas pump prices are unchanged at a national average of $3.37 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 9 cents higher than it was a month ago and 28 cents higher than a year ago.
In other energy trading, natural gas prices fell 6 cents to $2.95 per 1,000 cubic feet. Prices have declined this year as analysts predict that U.S. supplies will be more than ample after a mild winter that's cut into heating demand.
Natural gas is beginning 2012 at the cheapest level in a decade, comparing with the start of previous years. Bank of America Merrill Lynch analysts cut their price forecasts for natural gas by $1 to an average of $3.30 per 1,000 cubic feet in 2012.
"As a result of a warm winter and rampant production growth, we are now starting the new gas year with historically high storage levels and an incredible supply glut," Bank of America analyst Sabine Schels said.
Heating oil rose by 3 cents to $3.11 per gallon and gasoline futures rose by 2 cents to $2.78 per gallon.