BUSINESS

Oil rises near $88 a barrel after dropping to 4-month low; natural gas jumps

04/18/2013 07:47 EDT | Updated 06/18/2013 05:12 EDT
NEW YORK, N.Y. - Oil rose from a four-month low Thursday, while natural gas soared to the highest level in 21 months on signs of robust demand for the fuel.

West Texas Intermediate, the U.S. benchmark oil for May delivery rose US$1.05, or 1.2 per cent, to finish at $87.73 a barrel on the New York Mercantile Exchange. Oil dropped $2.04, or 2.3 per cent, on Wednesday — the fourth daily drop of at least two per cent in April.

Concerns over global economic growth have caused the price of oil and other commodities to drop sharply. This week China reported slower-than-expected economic growth while the International Monetary Fund lowered its outlook for world economic growth for this year.

Natural gas futures rose 19 cents, or 4.4 per cent, to end at $4.40 per 1,000 cubic feet. The last time natural gas hit that level was July 2011.

The Energy Department's Energy Information Administration reported that natural gas in storage grew by 31 billion cubic feet to 1.704 trillion cubic feet for the week ended April 12.

Supplies typically rise in the spring, but last week's increase was less than analysts expected. Homeowners in some parts of the U.S. still needed to turn the heat on as temperatures dropped below normal.

In London, Brent crude, which is used to price oil used by many U.S. refiners, was up $1.44, or 1.5 per cent, to finish at $99.13 on the ICE Futures exchange.

In other energy futures trading on the Nymex:

— Gasoline rose three cents to end at $2.76 per gallon.

— Heating oil rose four cents to finish at $2.78 a gallon.

___

Pamela Sampson in Bangkok and Pablo Gorondi contributed to this report.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)