Oil rises on higher economic growth expectation
The price of oil rose Thursday on an improved reading on US economic growth while lawmakers continued their tussle over the 'fiscal cliff'.
The US Commerce Department on Thursday raised its estimate for US economic growth to an annual rate of 2.7 per cent in the summer quarter of this year.
That's much higher than the two per cent rate estimated a month ago and more than twice the 1.3 per cent rate in the three previous months.
Also Thursday, The National Association of Realtors said its seasonally adjusted pending home sales index rose in October to its highest level in nearly six years.
Any sign the economic recovery is picking up can be a catalyst for energy prices.
Benchmark crude rose $1.58, or 1.8 per cent, to close at US$88.07 a barrel on the New York Mercantile Exchange.
There was no progress in closely watched budget talks in Washington. Lawmakers are trying to hammer out a deal to avoid a series of tax increases and spending cuts slated to start in January that economists warn would send the country back into recession.
House Speaker John Boehner accused Democrats of failing to outline specific cuts to benefit programs, which Republicans contend must be part of any deal. The White House and other Democrats said the Republicans were the ones holding things up.
In other trading, Brent crude, which is used to price international varieties of oil, rose US$1.25 to US$110.76 per barrel on the ICE Futures Exchange in London.
Other energy futures on the New York Mercantile Exchange:
Heating oil rose 3.3 cents to US$3.04 a gallon.
Natural gas fell 15.3 cents to $3.65 per 1,000 cubic feet.
Wholesale gasolene gained 5.3 cents to US$2.79 a gallon.