Oil prices rose above $75 a barrel Friday, boosted by a weaker dollar and rising global stock markets while investors looked to U.S. economic indicators for signs crude demand may be improving.
By early afternoon in Europe, benchmark crude for October delivery was up 61 cents to $75.18 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.45 to settle at $74.57 on Thursday.
Oil prices have traded near $75 a barrel for most of the past year as the global economy emerges from last year’s recession, but crude demand remains weak in developed countries.
Crude traders pay close attention to U.S. economic indicators to shed light on oil consumption and to stock markets as a barometer of overall investor sentiment. Most Asian and European stock markets were higher Friday.
A weaker dollar was also seen lifting prices by making crude cheaper for investors holding other currencies.
The euro rose to $1.3130 on Friday from $1.3080 late Thursday in New York on, while the British pound was worth $1.5683, up from $1.5640.
Limiting gains was news that a key U.S. oil pipeline in the Midwest which had been shut down since Sept. 9 because of a leak near Chicago had been fixed and would resume operations on Friday.
The pipeline owned by Enbridge Energy Partners says oil will begin flowing through the pipeline, which transports oil from western Canada to U.S. refiners, on Friday.
Economic news Thursday suggested the U.S. economy is stabilizing, but growth may be sluggish. The Labor Department said first-time claims for unemployment benefits fell to a two-month low last week of 450,000. The Producer Price Index, which indicates prices at the wholesale level, rose more than expected last month, easing concerns about deflation.
On Friday, investors will be eyeing the latest figures on consumer prices and consumer sentiment.
"CPI and consumer sentiment data will likely determine how the equities and hence, oil prices finish this week," Ritterbusch and Associates said in a report. "We still view the macroeconomic influence as positive and capable of pushing oil prices back up by as much as $4 to $5 possibly by late September or early October."
In other Nymex trading in October contracts, heating oil was up 2.63 cents at $2.1253 a gallon and gasoline gained 2.08 cents to $1.9455 a gallon. Natural gas rose 0.8 cent to $4.070 per 1,000 cubic feet.
In London, Brent crude added 86 cents to $79.34 a barrel on the ICE Futures exchange.
