In The News

Oil gains to around $79 amid mixed U.S. data

Oil prices hovered near $79 a barrel Tuesday as investors considered mixed signals about the strength of the U.S. economy and the dollar's fluctuations against the euro.

By early afternoon in Europe, benchmark crude for April delivery was up 33 cents at $79.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract Monday fell 96 cents to settle at $78.70.

Oil prices have been drifting between $70 a barrel and $80 for most of the last eight months as crude demand remains weak in developed countries despite economies expanding again in the aftermath of last year's recession.

On Monday, U.S. economic figures reflected a slow but steady recovery. Manufacturing output expanded in February for a seventh straight month, but it slowed compared with January and fell short of expectations.

Personal spending rose slightly more than expected in January while construction spending fell for a third straight month.

Investors will be eyeing weekly U.S. crude inventory data and February jobs numbers later this week for a possible catalyst for oil prices.

"At the moment, we do not see any fundamental reason for oil to be able to generate enough momentum to break to the upside," said Mike Fitzpatrick vice president of energy at MF Global in New York, citing expectations of a drop of 50,000 in non-farm payrolls.

"A considerably greater number would probably bring renewed pessimism to market participants about a nascent recovery."

The dollar was stronger against the euro on Tuesday, but lost some of the gains made earlier in the session, when it peaked at $1.3440. A stronger dollar tends to weigh on oil prices as it makes crude more expensive for international investors.

The 16-nation euro was down to US$1.3559 in midday European trade, from $1.3574 late Monday in New York.

In other Nymex trading in April contracts, heating oil was up 1.04 cents at $2.0339 a gallon, and gasoline gained 1.82 cents to $2.1738 a gallon. Natural gas rose 3.9 cents to $4.718 per 1,000 cubic feet.

In London, Brent crude was up 46 cents at $77.35 on the ICE futures exchange.

Associated Press writer Alex Kennedy in Singapore contributed to this report.

Dorothy Cox of The Trucker staff may be contacted to comment at [email protected] .

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