Oil rises above US$77 amid strong earnings

Benchmark crude for September delivery was up 23 cents at US$77.22 a barrel by midday European time in electronic trading on the New York Mercantile Exchange. The contract fell 51 cents to settle at US$76.99 on Wednesday.

Oil has traded near US$75 for most of this year on mixed U.S. economic news: Corporate earnings have rebounded, but the unemployment rate remains high. On Wednesday, a Federal Reserve report said the economic recovery is slowing in some parts of the country.

However, sentiment was boosted somewhat on Thursday after more strong earnings reports from companies in Europe and a report showing economic sentiment in the 16-country eurozone is at its highest level for over two years.

Amid the mixed indicators, global oil consumption appears to remain sluggish. Crude supplies grew by 7.3 million barrels last week, according to the Energy Department's Energy Information Administration. Analysts expected a drop of 2.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Supplies of gasoline and distillates, which include diesel and heating oil, also rose.

Barclays Capital said in a report that the main driver of oil prices has been skittish sentiment about the economic recovery. “It may take a while before the ghosts from the previous crisis go away entirely.”

In other Nymex trading in August contracts, heating oil rose 0.92 cent to US$2.0056 a gallon, gasoline rose 0.20 cent at US$2.0654 a gallon and natural gas jumped 3.4 cents to US$4.752 per 1,000 cubic feet.

Brent crude was up 27 cents to US$76.33 a barrel on the ICE futures exchange.

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