BUSINESS
04/03/2012 12:37 EDT | Updated 06/03/2012 05:12 EDT

Oil falls to UD$104 amid mixed signs about global economic strength

NEW YORK, N.Y. - Oil prices fell Tuesday after a two-day rise as traders eyed mixed signs about the strength of the global economy.

Benchmark West Texas Intermediate crude for May delivery gave up $1.22 to settle at US$104.01 a barrel on the New York Mercantile Exchange. The contract rose $2.21 to settle at US$105.23 a barrel on Monday.

Losses accelerated after minutes from a Federal Reserve meeting last month showed the Fed sketched a slightly sunnier view of the U.S. economy, largely because of the best three months of hiring in two years. But members noted that there have been similar bursts of hiring in the past two years that ended up fading.

In London, Brent crude fell 57 cents to finish at US$124.56 a barrel on the ICE Futures exchange.

Crude has traded near US$105 a barrel since February as traders weigh an improving U.S. economy against signs of weakening growth in Europe and China.

Prices were bolstered Monday by a report that showed U.S. industrial production grew in March at a faster pace than February while China said on the weekend that manufacturers also gained momentum in March.

However, manufacturing data from France and Germany weakened, suggesting Europe will likely face a recession this year.

Speaking in Washington on Tuesday, IMF chief Christine Lagarde said the global economy is making some advances in digging itself out of the worst downturn in decades, but that the recovery remains particularly frail in Europe.

She suggested cutting government spending too quickly in developed countries like the United States and larger European countries could make things worse, not better.

In other energy trading in New York, heating oil fell by 2.21 cents to finish at US$3.2275 a U.S. gallon (3.79 litres) and gasoline futures rose 1.32 cents to end at US$3.3954 a gallon. Natural gas increased by 3.5 cents to finish at $2.187 per 1,000 cubic feet.

(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)