Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Oil rises to 3-week high

oiltop.pngOil prices rose to a 3-week high near $78 a barrel, but analysts say prices won't break above $80 a barrel until the U.S. economy turns around. By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- Oil rose to its highest level in three weeks, nearing $78 a barrel, as signs of growing Chinese demand for energy and a cheerier Wall Street boosted prices.

Crude for August delivery rose 0.7% Monday and climbed 1.2% Tuesday to finish at the highest level since June 28, at $77.44 a barrel. But prices drifted 19 cents lower on Wednesday. The rise tracked gains in the stock market, as investors welcomed better-than-expected company earnings.

A report Tuesday, from the International Energy Agency said that China overtook the U.S. as the world's biggest energy user last year, and prospects for continued growth and rising energy demand are strong.

"Everyone has been so concerned about the U.S. economy, but the report on Chinese demand opened up traders' eyes to the idea that we shouldn't worry about every piece of economic data from the U.S., but instead take a global view," said James Cordier, president of Liberty Trading Group.

Oil futures, which switched to the September contract Wednesday, continued to climb for a third straight session early Wednesday, crossing $78 a barrel. But prices slipped later in the day, after a government report showed a surprise build in crude inventories. Still, they held above $77 a barrel.

The Energy Information Administration reported that crude stocks climbed by 400,000 barrels last week, surprising analysts who were expecting inventories to fall by 1.6 million barrels, according to a consensus estimate collected by energy information provider Platts.

Gasoline inventories and distillates, used to make heating oil and gas, also rose more than expected.

A stronger dollar also weighed on prices Wednesday. Crude oil, like other commodities, is priced in dollars, and a stronger greenback pressures prices.

Despite the recent run, Cordier expects oil prices to remain between $70 and $80 a barrel, where they have been trading since May.

"The global economy is strong enough to support prices above $70, but without the U.S. economy turning around -- stocks sustaining a rally and unemployment coming down -- oil prices won't be able to break through $80 a barrel," he said. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.67%3.76%
15 yr fixed2.79%2.83%
5/1 ARM3.07%3.10%
30 yr refi3.67%3.76%
15 yr refi2.82%2.83%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,027.05 -177.92 -1.10%
Nasdaq 4,283.75 -79.39 -1.82%
S&P 500 1,853.44 -26.61 -1.42%
Treasuries 1.74 -0.11 -6.11%
Data as of 10:37pm ET
Company Price Change % Change
Bank of America Corp... 12.27 -0.68 -5.25%
Chesapeake Energy Co... 2.04 -1.02 -33.33%
Facebook Inc 99.75 -4.32 -4.15%
Freeport-McMoRan Inc... 5.27 -0.41 -7.22%
Williams Companies I... 11.16 -5.96 -34.81%
Data as of 4:15pm ET

Sections

A former deputy secretary in Obama's Department of Education will take over the University of Phoenix's parent company, Apollo Education Group, once the sale is finalized. More

Yelp announced another loss Monday afternoon as its sales growth slows. The company also said its CFO is stepping down. More

Zenefits founder and CEO Parker Conrad steps down. COO David Sacks takes over, with a call to fix compliance issues and change the company's culture. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

A former deputy secretary in Obama's Department of Education will take over the University of Phoenix's parent company, Apollo Education Group, once the sale is finalized. More