NEW YORK, N.Y. - The price of oil shot to a 16-month high Thursday on signs the U.S. job market is improving, although not by enough to prompt the Federal Reserve to pull back on its bond-buying program.
Benchmark crude for August delivery rose $1.56 to finish at $108.04 a barrel, the highest close since March 19, 2012.
Oil has jumped more than $11 a barrel in July, and pushed up the price of gasoline along with it. Gasoline futures have gained 13 per cent since July 1, and the average price for a gallon of gas at the pump has risen 18 cents, or five per cent, to $3.67.
On Thursday U.S. economic news was good on two fronts: The Labor Department reported a drop in claims for unemployment benefits and the Federal Reserve Bank of Philadelphia said manufacturing activity in the mid-Atlantic region grew in July at the fastest pace in more than two years.
Oil markets are also getting support this week from comments by Ben Bernanke that the Fed will support the U.S. economy as long as necessary. The Fed chairman told lawmakers in appearances Wednesday and Thursday that there was no preset schedule for ending the existing stimulus program, raising hopes it may not end as quickly as some had feared.
In London, Brent crude rose nine cents to $108.70 a barrel on the ICE Futures exchange.
In other energy futures trading on Nymex:
— Wholesale gasoline was flat at $3.11 a gallon.
— Heating oil rose three cents to $3.10 a gallon.
— Natural gas added 18 cents to $3.81 per 1,000 cubic feet.
AP Writer Pablo Gorondi in Budapest contributed to this report.
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