Oil Rises Above $96; U.S. Pump Prices Average $3.31

NEW YORK (AP) -- The price of oil rose above $96 a barrel on Tuesday as global economic reports remain generally positive.

Benchmark oil rose 66 cents to $96.22 at midday on the New York Mercantile Exchange.

A U.S. government report showed that last year was the best year for U.S. home sales since 2007. Meanwhile, German investor confidence saw an unexpectedly large jump in a new survey. The Bank of Japan's announcement of more bond purchases next year also buoyed oil prices.

But it's unclear whether oil can rise much higher in the near term. Supplies of oil are ample, and there remains some uncertainty about the outcome of negotiations in Washington on the U.S. debt limit. Though Republican lawmakers are expected to accept a temporary increase in the borrowing limit, a final deal is still not in sight.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, said in a note to clients that recent support from bullish economic reports "could be wearing thin." He also cautioned that economic gains in the U.S. and China might not "be translating to appreciable increases in global oil demand."

At the pump, gasoline ticked up to a national average of $3.31 a gallon. That's still about 7 cents less than a year ago.

Brent crude, used to price international varieties of oil, was up 34 cents to $112.05 per barrel on the ICE Futures exchange in London.

In other energy futures trading in New York:

  • Natural gas fell 2 cents to $3.54 per 1,000 cubic feet.
  • Wholesale gasoline advanced 3 cents to $2.83 per gallon.
  • Heating oil rose 2 cents to $3.07 a gallon.

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