Oil ends above $53 on signs of recovery
Crude futures add 4% as reports show the U.S. economy may be bottoming out.
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| Click on the chart to see other commodity prices. |
NEW YORK (CNNMoney.com) -- Oil prices ended above $53 a barrel Friday for the first time in more than a month as new economic reports showed that the nation's recession may be easing.
Light sweet crude for June delivery settled up $2.08 a barrel to $53.20 a barrel. Oil climbed as high as $53.65 earlier in the session. The last time oil settled above $53 a barrel was March 26, when oil ended the session at $54.34 a barrel.
The global economy has been mired in the recent economic downturn, and with consumers and businesses demand for less energy, the price of oil has plunged from its peak of over $147 a barrel in July
In the past couple of months, oil prices have hovered around $50 a barrel. But new signs that the economy may be on the upswing gave a boost to the oil market Friday.
A new report showed that the pace of decline in the manufacturing sector is slowing.
The Institute for Supply Management's manufacturing index rose to 40.1 in April from 36.3 in March versus forecasts for a rise to 38.4. Any reading under 50 indicates the sector is still contracting, but the rise showed that the contraction is not happening as quickly as before.
Other reports issued this week showed that consumer confidence was improving.
The University of Michigan's consumer sentiment index was revised up to 65.1 Friday from a previous reading of 61.9. Economists thought it would be unchanged. And Tuesday, the Conference Board's sentiment index climbed to 39.2 in April from an upwardly revised 26.9 in March.
The week's most important economic report - Gross Domestic Product - came out on Wednesday.
The government said that the U.S. economy shrank at an annual pace of 6.1% in the first quarter, much worse than the 4.7% drop that economists were expecting.
But the same report also showed that personal spending rose at an annual 2.2% rate, the first uptick since the second quarter of 2008. Business inventories plunged by more than $100 billion during the quarter, the biggest drop on record. Economists read the drop in inventories as a sign that businesses will have to ramp up production in coming months.
A new sense of optimism has been supporting Wall Street as well. Oil prices have tended to rise with the stock market in recent months, because Wall Street serves as a barometer for the health of the economy. In a healthy economy, demand for oil generally rises, sending prices up.
For the month of April, the Nasdaq gained 12.3%, the S&P 500 gained 9.4% and the Dow Jones gained 7.3%.
As oil prices climb, so do prices at the pump. A gallon of regular gasoline cost $2.054, up three tenths of a cent from the previous day's price of $2.051, according to survey results released Friday by motorist group AAA. That's down $2.06, or 50%, from the record high price of $4.114 last July. 
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