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Oil prices rise as consumers in US splash some cash

DRIVING TO THE MALL: Better-than-expected sales at Ruby Tuesday, Hot Topic and Wal-Mart may indicate the economy has seen the worst, market watchers said

AP , NEW YORK

Oil prices rose sharply on Thursday despite more hints that energy use is way down, with traders focusing instead on a rising stock market and surprising news from retailers that suggests Americans are spending money.

If registers at the mall are ringing, that likely means people are driving.

Benchmark crude for May delivery rose nearly 6 percent, or US$2.86, to settle at US$52.24 a barrel on the New York Mercantile Exchange (NYMEX).

Trading was very light on a shortened trading week. The NYMEX was closed for Good Friday.

In London, Brent prices jumped US$2.47 to settle at US$54.06 a barrel on the ICE Futures exchange.

“A lot of little things are giving investors hope that maybe the economy has seen the worst,” said Andrew Lebow, senior vice president and broker at MF Global.

In the past week, home decor chain Bed Bath & Beyond Inc and restaurant Ruby Tuesday Inc have reported better-than-­expected first-quarter results. Teen retailer Hot Topic Inc said sales at stores open at least a year rose more than analysts’ forecasts.

On Thursday, Wal-Mart Stores Inc said sales at stores open at least a year, excluding fuel, rose 1.4 percent, short of the 3.2 percent rise analysts were predicting. However, the world’s largest retailer said a later Easter was to blame and that this month’s sales were likely to be boosted by the holiday.

The US government on Thursday said new jobless claims fell more than expected. The Labor Department’s tally of initial jobless claims fell to a seasonally adjusted 654,000, down from a revised 674,000 the previous week. Analysts expected claims to drop only to 660,000.

“People are buying oil when they see signs of economic hope,” said Phil Flynn, analyst at Alaron Trading Corp.

Flynn said he would know that global demand has returned — and higher crude prices justified — when he sees both a significant drop in petroleum supplies and a decision by refineries to crank up their operations.

“Right now, we’re not seeing that,” Flynn said.

The US government reported on Thursday that natural gas storage levels in the US rose more than expected last week. Natural gas is a key energy source for many power plants and factories. Rising storage levels suggest that people are using less energy, and companies are making fewer products.

Workers in energy-intense industries like metals or manufacturing have been hit especially hard in recent rounds of job cuts. That is reflected in the growing stocks of oil and natural gas in US storage facilities. It is potential energy that is not being used, one side effect of a very bad recession.

The US Energy Department’s Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states rose by 20 billion cubic feet (566.3 million cubic meters) to about 1.67 trillion cubic feet for the week ended last Friday.

Analysts had expected a boost of between 11 billion to 16 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

On Wednesday, the US government reported crude supplies increased by 1.7 million barrels and gasoline inventories rose by 600,000 barrels,

OPEC countries continue to trim crude production in hopes of siphoning off a global surplus. Tanker tracker Oil Movements reported on Thursday that shipments from the Organization of Petroleum Exporting Countries are expected to drop another 280,000 barrels for the four-week period to April 25.

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