Oil near $89 as ECB's Draghi vows to save eurozone
Oil prices rose Thursday after the president of the European Central Bank vowed to save the eurozone.
Comments by ECB president Mario Draghi helped reverse the direction of oil prices, which had been falling earlier in the session on a surprising rise in U.S. crude inventories and a slowdown in South Korea's economy.
Draghi told a conference of investors in London on Thursday that he will do "whatever is necessary to save the eurozone and protect the euro from collapse, including fighting unreasonably high borrowing costs," according to a report from Sucden Financial in London.
Draghi's remarks "boosted market sentiment and increased risk appetite," Sucden Financial said.
By early afternoon in Europe, benchmark crude for September delivery was up 76 cents at $89.73 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 47 cents to settle at $88.97 in New York on Wednesday.
In London, Brent crude was up 87 cents at $105.25 on the ICE Futures exchange in London.
A rise in U.S. crude supplies pointed to weak demand as the recovery in the world's No. 1 economy stumbles. The Energy Information Administration reported that the nation's crude supply grew by 2.7 million barrels last week. Analysts were expecting supplies to fall by 250,000 barrels, according to a survey by Platts, the energy-information arm of McGraw Hill.
U.S. crude supplies have grown this year to the highest levels since 1990. Gasoline supplies rose more than expected. The EIA said that gasoline supplies increased by 4.1 million barrels last week. Analysts were expecting supplies to grow by only 750,000 barrels.
South Korea's second quarter growth figures provided more evidence of the toll that Europe's prolonged debt crisis is taking on Asia. The region's fourth-largest economy said economic growth slowed to a two-year low as weakness in Europe crimped demand from South Korea's biggest market China.
In other Nymex futures trading, heating oil rose 2.16 cents to $2.8683 a gallon and gasoline added 2.58 cents to $2.7420 a gallon. Natural gas gained 1.5 cents to $3.067 per 1,000 cubic feet.