Oil follows stocks higher
The price of oil rose slightly Tuesday, following stocks and continuing a run-up that began two months ago.
Benchmark crude for March delivery rose 80 cents to finish at $96.66 on the New York Mercantile Exchange. Nymex floor trading was closed on Monday for the Presidents Day holiday in the U.S. The contract fell $1.45 on Friday.
Oil prices have been rising since mid-December, when oil traded around $87 per barrel. Analysts noted that investors have bought into oil markets speculatively in recent weeks on hopes for a stronger recovery in the global economy.
Stocks rose because of reports of a possible merger between Office Depot and OfficeMax, which investors took as a sign that more deals could be on the way.
Addison Armstrong, an analyst at Tradition Energy, noted that the latest trading report from the U.S. Commodity Futures Trading Commission showed that managers have boosted bets on rising oil prices by 4.4 percent for the week that ended Feb. 12.
Economic indicators have been mixed, however, showing many parts of Europe remain in recession and the U.S. only gradually recovering. That leaves crude oil prices vulnerable to a sell-off, according to analysts at Commerzbank.
In the U.S., a report on Tuesday showed that confidence among homebuilders slipped compared to January, as builders remain concerned about the sturdiness of the U.S. economy and the risk of rising unemployment.
In Germany, a survey of investor confidence was upbeat on Tuesday but, looking ahead, traders are concerned about political developments elsewhere in the 17-country eurozone, mainly Italy. Polls have suggested that elections are likely to produce a split parliament, making it difficult for a coalition government to push through unpopular economic reforms.
Brent crude, used to price many international varieties of oil, was down 34 cents to $117.66 per barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Heating oil fell 2.98 cents to $3.1806 per gallon.
— Wholesale gasoline fell 1.33 cents to $3.1212 per gallon.
— Natural gas added 11.9 cents to $3.2720 per 1,000 cubic feet.