Oil Prices Climb

Source:

"Benchmark crude rose about 3% in midday trading Tuesday."

Oil prices rose Tuesday as the global recovery got a boost on two fronts after weeks of mixed economic news.

Benchmark crude rose about 3% in midday trading, a day after the quarterly company earnings season got off to a better-than-expected start. In addition, a new global forecast called for a slight improvement in oil demand next year.

Benchmark crude for August delivery gained $2.16 at $77.13 on the NYMEX.

At the gas pump, many drivers are still seeing lower prices. The national average for a gallon of unleaded regular was $2.713 Tuesday, according to AAA, Wright Express and Oil Price Information Service. That's 1.1 cents less than a week ago and 18.4 cents higher than a year ago.

The prospect of an improving economy with stronger demand for oil and gas offset concerns about above-average supplies, which have kept crude prices bouncing between $70 and $80 a barrel since the end of May.

The Dow Jones Industrial Average rose more than 160 points in midday trading. The NASDAQ and the S&P 500 were higher as well. Earnings are expected to dictate trading over the next few weeks as hundreds of companies release results.

The International Energy Agency predicted 2011 global oil demand would increase by 1.3 million barrels a day, or 1.6%, to 87.8 million barrels a day, largely due to economic growth in emerging countries.

Demand in richer, more developed countries is expected to fall by 0.5% from this year, in part because of fuel-efficiency measures that will reduce the need for oil, IEA said.

The forecast was the first detailed look at 2011 from the Paris-based agency, the energy arm of the Organization for Economic Cooperation and Development.

Its 2010 outlook was little changed at 86.5 million barrels a day, a 2.1% increase from 2009.

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