Oil prices climbed back above $75 a barrel today, tracking rising stock markets as strong corporate earnings reports boosted confidence in the U.S. economy.
By early afternoon in Europe, benchmark crude for August delivery was up 63 cents to $75.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.14 to settle at $74.95 on Monday.
Oil prices have danced around the $75 level for about a year as the global economy recovers from last year’s recession but growth in developed economies remains sluggish. Burgeoning U.S. crude inventories and weak demand have kept investors from bidding oil higher.
Traders took heart from Alcoa Inc.’s second-quarter profit of 13 cents a share, which beat analysts’ forecast by one cent. Alcoa, the largest U.S. aluminum producer, is usually the first major company to report earnings, and it said late yesterday that revenue rose to $5.2 billion, more than analyst estimates.
Alcoa also said global consumption of aluminum will grow this year by more than it had forecast just three months ago.
Later this week, Intel Corp., Google Inc., JPMorgan Chase & Co., and Bank of America Corp. are scheduled to announce earnings.
A fresh report from the Paris-based International Energy Agency, which predicted that oil demand would rise next year on economic growth in developing countries, also helped lift prices.
Global oil demand should rise by a daily 1.3 million barrels to 87.8 million barrels a day in 2011, a rise of 1.6 percent on 2010, the IEA said.
Still, some analysts remained cautious about any acceleration in the world’s appetite for oil.
“Demand has been increasing recently, but we are comparing it to last year’s extraordinarily weak demand, in the heart of the recession,” said a report from U.S. energy consultancy Cameron Hanover.
In other Nymex trading in August contracts, heating oil gained 0.91 cent to $2.0004 a gallon, gasoline rose 0.75 cent to $2.0355 a gallon and natural gas rose 0.9 cent to $4.397 per 1,000 cubic feet.
In London, Brent crude advanced 83 cents to $75.20 a barrel on the ICE Futures exchange.