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Oil soars on positive signs for global economy

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The Associated Press | August 1, 2013 03:20 PM EST | AP

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NEW YORK — The price of oil is suddenly marching upward again.

Oil rose $2.86 a barrel Thursday, for a two-day gain of $4.81, or 4.7 percent. That erased a $4 decline in the week ended Tuesday.

Positive signs on the global economy were the catalyst Thursday. Data from China and Europe showed improvement in manufacturing. In the U.S., in addition to a strong report on manufacturing, a drop in unemployment claims indicated a strengthening job market.

Even with those signs of improvement, global central bankers show no inclination of easing up on measures that have kept interest rates at historic lows – and prompted investment in riskier assets like oil and stocks.

On Thursday Mario Draghi, head of the European Central Bank, indicated it is nowhere near withdrawing its help for the euro area's economy. On Wednesday the U.S. Federal Reserve hinted that it's not ready to slow its bond-buying program, which has kept long-term rates low in an effort to boost borrowing and spending.

At the gas pump, drivers paid an average of $3.63 Thursday, down 3 cents from a week ago, but still 11 cents higher than at this time a year ago.

Benchmark oil for September delivery gained 2.7 percent to close at $107.89 a barrel on the New York Mercantile Exchange.

On Friday attention will be focused on the release of hiring figures for July, which will be examined for hints about future energy demand in the world's No. 1 economy.

Brent crude, traded on the ICE Futures exchange in London, rose $1.84 to finish at $109.54 per barrel.

In other energy futures trading on the Nymex:

_ Heating oil was up 4 cents to end at $3.10 a gallon.

_ Natural gas fell 6 cents to finish at $3.39 per 1,000 cubic feet.

_ Wholesale gasoline rose 3 cents to end at $3.03 a gallon.