Oil hovers above $75
<p>An oil pump works at sunset on Sept. 13 in the desert oil fields of Sakhir, Bahrain. A warm response to new global banking rules and robust Chinese economic data shored up sentiment in the markets Monday with stocks up strongly.</p>
Oil prices hovered above $75 a barrel Friday as an unexpected rise in German business confidence helped to shore up sentiment amid ongoing concerns about the pace of the U.S. economic recovery.
By early afternoon in Europe, benchmark crude for November delivery was up 12 cents to $75.30 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents to settle at $75.18 on Thursday.
German business confidence in September rose unexpectedly to its highest level since June 2007, according to the Ifo Institute, on the back of the country's impressive economic performance in the April-June quarter when Europe's biggest economy grew by a massive quarterly rate of 2.2 percent.
The survey though suggested that growth will likely falter, partly because of a slowdown in the U.S. economic recovery.
On Thursday, concerns over the U.S. recovery were reinforced by Labor Department figures showing that initial claims for jobless aid rose by 12,000 last week to a seasonally adjusted 465,000. That was the first increase in five weeks.
Meanwhile, the National Association of Realtors said sales of previously occupied homes rose 7.6 percent in August from July, which was the worst month for sales in 15 years. And the Conference Board, a private research group, said its index of leading economic indicators rose modestly in August.
The mixed figures suggest that the U.S. economy will likely avoid a double-dip recession but that growth will be modest.
Earlier this week, the Energy Department said crude inventory levels extended decades-long highs.
Oil prices are being buffeted by "the offsetting influences of bearish oil balances and supportive economic releases that have proven sufficiently favorable," Ritterbusch and Associates said in a report.
Investors will be watching closely the latest news on durable goods and new home sales later Friday for more clues about the strength of the U.S. economy.
The nearing end of the hurricane season in the Gulf of Mexico, which sometimes affects oil production in the region, was seen removing one of the supportive factors for prices.
"Once the hurricane season starts to fade by mid-October, we are expecting to see a rather sharp break in prices," said a report from Edward Meir at MF Global in New York. "As the weather 'prop' will be pulled away, crude's more bearish fundamentals will set in."
In other Nymex trading in October contracts, heating oil fell 0.44 cent to $2.1101 a gallon and gasoline added 0.20 cent to $1.9194 a gallon. Natural gas shed 1.5 cents to $4.004 per 1,000 cubic feet.
In London, Brent crude rose 9 cents to $78.20 a barrel on the ICE Futures exchange.