Oil rises on higher economic growth expectation
NEW YORK — The price of oil rose Thursday on an improved reading on U.S economic growth while lawmakers continued their tussle over the “fiscal cliff.”
The Commerce Department Thursday raised its estimate for U.S. economic growth to an annual rate of 2.7 percent in the summer quarter of this year. That’s much higher than the 2 percent rate estimated a month ago and more than twice the 1.3 percent rate in the three previous months.
Also Thursday The National Association of Realtors said its seasonally adjusted pending home sales index rose in October to its highest level in nearly six years.
Any sign the economic recovery is picking up can be a catalyst for energy prices.
Benchmark crude rose $1.58 to close at $88.07.
Falling prices at the gas pump could also drive Americans to spend more money on other things, like holiday gifts, further fueling the economy. The national average for a gallon of regular has been inching lower and is now $3.41. That is down about 12 cents from a month ago — although still higher than a year ago.
There was no progress in closely watched budget talks in Washington. Lawmakers are trying to hammer out a deal to avoid a series of tax increases and spending cuts slated to start in January that economists warn would send the country back into recession.
House Speaker John Boehner accused Democrats of failing to outline specific cuts to benefit programs, which Republicans contend must be part of any deal. The White House and other Democrats said the Republicans were the ones holding things up.
In other trading, Brent crude, which is used to price international varieties of oil, rose $1.25 to $110.76 per barrel on the ICE Futures Exchange in London.
Other futures on the New York Mercantile Exchange:
n Heating oil rose 3.3 cents to $3.04 a gallon
n Natural gas fell 15.3 cents to $3.65 per 1,000 cubic feet
n Wholesale gasoline gained 5.3 cents to $2.79 a gallon