Submitted by Fox First at Ten on February 25th
By PABLO GORONDIAssociated Press
The price of oil rose by more than a dollar Monday, to above $94 a barrel, as it recovered from sharp drops last week and echoed strong gains in European stock markets.
By early afternoon in Europe, benchmark crude for April delivery was up $1.11 to $94.24 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to settle at $93.13 in New York on Friday.
Oil dived last week on the possibility that the Federal Reserve might stop offering monetary stimulus, which its most recently released minutes suggested was possible. That would strengthen the dollar, making crude more expensive for international investors, and shut off a supply of money that some say had been fueling speculative trades in commodity markets.
The price of crude stabilized Friday, helped by the European Commission's prediction that the recession afflicting the economy of the 17 countries sharing the euro will bottom out during the first half of the year.
Investors, meanwhile, are keeping an eye on a new round of talks beginning Tuesday in Kazakhstan between Iran and the five permanent members of the U.N. Security Council plus Germany over the Islamic Republic's nuclear program.
Iran, nominally one of the world's top oil producers, has had to make substantial output cuts because U.S.-led sanctions are greatly limiting its crude exports.
Also supporting prices was a broad rise in stock markets that suggested a more positive view of global economic growth. The gains were driven by Japan, where investors expected the next head of the Bank of Japan to be supportive of looser monetary policy to kick-start growth.
That helped offset a survey showing Chinese manufacturing declined to a four-month low in February. While the survey temporarily sent oil prices to a session low of $92.96, some analysts said the result may not be as bad as it seems because of the weeklong Lunar New Year holiday, which fell in mid-February this year.
In London, Brent crude was up $1.55 to $115.65 on the ICE futures exchange in London.
In other energy futures trading on Nymex:
- Wholesale gasoline was up 5.18 cents at $3.3176 a gallon.
- Heating oil added 3.99 cents to $3.1417 a gallon.
- Natural gas jumped 10.9 cents to $3.40 per 1,000 cubic feet.
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