12/20/2011 09:09 EST | Updated 02/19/2012 05:12 EST

Oil above US$96 a barrel amid hopes of more favourable US economic data

NEW YORK, N.Y. - Oil prices soared Tuesday on promising economic news out of Europe and the United States.

Benchmark West Texas Intermediate crude rose $3.24, or 3.5 per cent, to US$97.29 per barrel in New York. Brent crude, which is used to price oil imported by U.S. refineries, rose $2.72, or 2.6 per cent, to US$106.36 per barrel in London.

Prices climbed on encouraging news about the global economy.

Germany reported that business and consumer confidence rose unexpectedly in December, and Spain's borrowing costs plummeted in a debt auction as the country promised more austerity measures to resolve its debt problems.

In the U.S., retailers said sales jumped last week while the government reported a surge in apartment construction and building permits in November.

If consumer spending and construction activity continue to grow, demand for oil will likely follow.

In other energy trading, heating oil rose 6.31 cents to US$2.8435 a U.S. gallon (3.79 litres) and gasoline futures rose 7.50 cents to US$2.5641 a gallon. Natural gas was essentially flat at US$3.098 per 1,000 cubic feet.