BUSINESS

Oil prices rise for third straight day, now above US$95 per barrel

08/16/2012 03:57 EDT | Updated 10/16/2012 05:12 EDT
Oil prices rose for the third day in a row on Thursday as hopeful signs for U.S. housing suggested that oil demand could rise, too.

Applications for building permits rose to their highest level in four years, according to the Commerce Department. If housing is picking up, the economy could be, too, and that would tend to raise oil prices.

Benchmark oil for September delivery rose US$1.27 to finish at $95.60 per barrel in New York. It's now up almost there per cent from last week.

On Wednesday, oil rose 90 cents per barrel on an unexpectedly large drop in crude supplies. That's another sign of stronger demand, which tends to drive up prices.

Increasing tensions between Israel and Iran have also been driving oil prices higher in recent weeks.

"Whenever somebody talks about blowing something up in the Middle East, it tends to make people nervous," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass.

Brent crude rose 96 cents to end at $115.27 on the ICE Futures exchange in London. It has gained more than $9 per barrel this month.

Natural gas lost 2.4 cents to finish at $2.72 per 1,000 cubic feet. A government report showed smaller-than-expected growth in natural gas in storage. Supplies are almost 16 per cent above year-ago levels and more than 12 per cent above the five-year average.

In other energy futures trading, heating oil rose four cents to end at $3.12 a gallon and wholesale gasoline fell less than a cent to finish at $3.08 a gallon.

Meanwhile, the average pump price for a gallon of regular gasoline in the U.S. remains at $3.71, the highest level since mid-May. That's up 30 cents from a month ago and 12 cents more than this time last year.

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