Oil price rises as US stocks stabilize

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Associated Press

Posted on February 4, 2014 at 3:32 AM

Updated Tuesday, Feb 4 at 3:00 PM

The price of oil rose 1 percent Tuesday on hopes that demand for US crude would remain on track even as some emerging economies falter.

Benchmark U.S. crude for March delivery was up 94 cents to $97.37 a barrel in midday trading in New York, reversing a loss of almost the same size Monday. Brent crude, a benchmark for international crude used by many U.S. refineries, was down 8 cents to $105.96 in London.

The U.S. oil price rose along with the U.S. stock market, which regained some ground Tuesday after a drop of 2.3 percent Monday.

Stock markets around the world have been slammed by currency problems in several emerging market countries, the Federal Reserve's decision to shrink its stimulus program, and a slowdown in the Chinese economy.

Tuesday's modest recovery in the U.S. stock market and a report by real estate data firm CoreLogic that showed a strong rise in U.S. home prices in December eased some fears that U.S. demand for fuel would fall.

So far this year, economic concerns have weighed less on oil prices than on company stock prices, analysts say. That's partly because a bitterly cold winter in the U.S. has increased demand for heating oil, which is keeping demand for crude — and global crude prices — strong compared with stock prices.

Forecasts for further cold across much of the U.S. sent natural gas for March delivery soaring 35 cents, or 7.2 percent, to $5.258 per 1,000 cubic feet. That's the highest price for natural gas since February 2010 other than a short spike last week in the price of a thinly-traded expiring futures contract.

The average U.S. retail price of gasoline, which has remained very stable so far this year, fell less than a penny to $3.27 per gallon. That's a penny cheaper than last week and four cents cheaper than a month ago.

In other energy futures trading on Nymex:

— Wholesale gasoline was up less than a penny to $2.609 a gallon.

— Heating oil was down less than a penny to $3.00 a gallon.

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