Further signs of an improvement in the U.S. economy helped the price of oil to push above $108 a barrel on Friday and to the highest since March last year.
By early afternoon in Europe, benchmark crude for August delivery was up 45 cents at $108.49 a barrel in electronic trading on the New York Mercantile Exchange. The contact rose $1.56 on Thursday.
The more heavily traded September Nymex contract was up 39 cents at $108.20 a barrel on Friday.
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 percent since July 1.
On Thursday U.S. economic news was positive 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.
The recent gains by the West Texas Intermediate, or WTI, the benchmark oil grade traded on the Nymex, have narrowed the spread to the Brent contract traded in London from over $20 in the past months to less than $1 now.
“Better-than-expected US economic data are providing the WTI price with upward momentum and so is the sharp reduction of U.S. crude oil stocks in past weeks,” said a report from analysts at Commerzbank in Frankfurt. “It cannot be ruled out that for the first time in three years WTI could become more expensive than Brent again in the near future. That said, we do not believe this situation will last, given the fact that US oil production is still rising and stocks are still high in the US.”
Although they remain near historical highs, U.S. stockpiles of crude oil have been reduced by 27.1 million barrels over the past three weeks, according to the Energy Department.
In London, Brent crude was up 33 cents to $109.03 a barrel on the ICE Futures exchange.
In other energy futures trading on Nymex:
— Wholesale gasoline added 3.13 cents to $3.0762 a gallon.
— Heating oil rose 1.28 cents to $3.1131 a gallon.
— Natural gas fell 3.2 cents to $3.78 per 1,000 cubic feet.