Oil Rises on Bullish U.S. Manufacturing Data

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Gas PricesNEW YORK (AP) - The price of oil is climbing on reports that U.S. factories have cranked into a higher gear.

Benchmark U.S. crude increased Monday by $1.61 to $104.63 per barrel in New York while Brent crude rose by $1.55 cents to $124.43 per barrel in London.

Manufacturers are big users of diesel fuel, so increased factory activity usually means increased demand for diesel.

The Institute for Supply Management, a trade group of purchasing managers, reported that U.S. manufacturing grew in March at a faster pace than February. U.S. factories added 100,000 jobs in the past three months to help fill a growing list of new orders.

China's manufacturers also gained momentum in March, according to a report published over the weekend.

The price of oil also reflects ongoing tensions over Iran's nuclear program. Iran exports 2.4 million barrels of oil each day. The U.S. and Europe have imposed sanctions that aim to make it more difficult to finance those exports. Traders are betting that if that oil comes off the market, world supplies will tighten this year.

Saudi Arabia, Libya and Iraq are expected to help out by pumping more oil this year. But there's still a risk that the standoff in Iran could escalate "into military action that screws things up across the Persian Gulf," said Peter Donovan, a broker with Vantage Trading.

Analysts estimate that oil prices are $15 to $20 per barrel higher this year due to fears of a prolonged conflict between Iran and the West.

Retail gasoline prices were flat over the weekend. The national average held at $3.925 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of gasoline is about 65 cents higher than it was at the beginning of the year. Experts predict that the national average could keep rising to a peak of $4.25 per gallon this year.

Meanwhile, natural gas futures fell to a 10-year low, losing 2 cents to $2.106 per 1,000 cubic feet. Natural gas prices have plummeted this year following a production boom that could push U.S. supplies close to their maximum capacity later this year.

In other energy trading, heating oil added 6.35 cents to $3.2336 per gallon and gasoline futures increased by 6.23 cents to $3.3704 per gallon.

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oohsah

My H key is sticking!

April 03 2012 at 7:13 AM Report abuse rate up rate down Reply
oohsah

The way that the price goes up on any crap news story about" All is good" needs to stop.We cannot continue this fleecing of te average person in tis country and I fear that sooner or later **** will hit the fan and someone will be killed.

April 03 2012 at 7:12 AM Report abuse rate up rate down Reply
1 reply to oohsah's comment
bggdg

If you're getting "fleeced" it's much more likely to be due to your status as a sub-average person.

After all, every transaction in a (semi) capitalist economy is one based on free exchange. When you sell something, by definition, you value the acquisition of the buyers money more than you value maintaining your stock of the good or service being sold. When you buy something, by definition, you value the acquisition of the sellers good or service more than you value maintaining your stock of money that you might otherwise use to acquire a different good or service. Both parties to this transaction are free to opt out if either feels the above conditions are not being met.

For this reason, "price" is nothing more than the markets mechanism for maintaining equlibrium between supply and demand.

April 03 2012 at 9:54 AM Report abuse rate up rate down Reply
skysob

inventories up every week, what a bunch of crap. shut down all f------ commidity markts!!!!!!!!!!!!!!!!!!!

April 02 2012 at 7:13 PM Report abuse +1 rate up rate down Reply
1 reply to skysob's comment
bggdg

Yes, just imagine how much oil we'd get without efficient trading markets!

April 02 2012 at 10:03 PM Report abuse rate up rate down Reply
mgh406

These figures do not agree with CNBC (the market channel)!

April 02 2012 at 3:13 PM Report abuse +2 rate up rate down Reply