SINGAPORE — Oil prices rose above $79 a barrel in Asia today as a global stock market rally gave crude traders optimism.
Benchmark crude for September delivery was up 44 cents to $79.39 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 59 cents to settle at $78.95 on Friday.
Almost all Asian and European stock markets rose today, led by a 1.8 percent increase in Hong Kong’s Hang Seng index. Oil traders often look to equity markets as a reflection of overall investor sentiment.
Oil has traded briefly above $80 this year before quickly sliding back into the $70s amid signs the U.S. economic recovery may slow in the second half. The government said Friday that second-quarter gross domestic product rose 2.4 percent but demand — such as consumption, business investment and housing construction — gained 5.1 percent, a good sign for oil demand.
“Anyone worried about a slowdown in U.S. demand should have been tickled pink by the Q2 GDP figures,” DBS bank said in a report. “High unemployment does not mean demand growth cannot be strong.”
Investors will be closely watching July employment figures. Analysts are expecting the economy lost 60,000 jobs last month and the unemployment rate rose to 9.6 percent from 9.5 percent in June.
In other Nymex trading in September contracts, heating oil rose 1.01 cents to $2.0982 a gallon, gasoline gained 1.29 cents to $2.1353 a gallon and natural gas jumped 5.5 cents to 4.978 per 1,000 cubic feet.
Brent crude was up 40 cents to $78.58 a barrel on the ICE futures exchange.