Oil Back Above $94 a Barrel After Early Loss

NEW YORK (AP) -- The price of oil rose back above $94 Wednesday after dropping earlier on disappointing economic reports from Europe and the U.S.

Benchmark oil for June delivery was up 9 cents to finish at $94.30 a barrel on the New York Mercantile Exchange. It fell as low as $92.13 in the morning before rising in tandem with U.S. stock markets.

Recently the stock market and, to a lesser degree, the oil market have shrugged off reports of sluggish economic growth, because it suggests that the Federal Reserve will keep pumping money into financial markets.

New figures released Wednesday showed the eurozone's economy continued to contract in the first quarter, keeping it in recession for a sixth consecutive quarter. And a report in the U.S. showed factories cut back sharply on production in April, suggesting economic growth may be slowing this spring.

That dreary economic news initially overshadowed the latest data from the Energy Department showing that oil supplies declined unexpectedly last week.

Crude supplies declined by 600,000 barrels, or 0.2 percent, to 394.9 million barrels, in the week ended May 10. Analysts expected an increase of 300,000 barrels. Still, demand for gasoline and distillates such as diesel remain below year-ago levels.

The national average for a gallon of gas rose about 1 cent from Tuesday, to $3.59 a gallon. That's 6 cents more than a month ago, 14 cents lower than a year ago.

Brent crude, a benchmark for many international oil varieties, rose 99 cents to $103.50 a barrel, after earlier dropping to $100.91 on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

  • Wholesale gasoline rose 3 cents to finish at $2.87 a gallon.
  • Heating oil was flat at $2.88 a gallon.
  • Natural gas added 5 cents to end at $4.07 per 1,000 cubic feet.

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