NEW YORK ? Oil prices rose Thursday on hopes that the economies of the U.S. and Europe could recover and avoid another recession. Jobless claims fell and factory orders rose in the U.S., and a key interest rate was cut in Europe.
In New York benchmark crude rose 91 cents to $93.42 per barrel in morning trading. Brent crude rose 76 cents to $110.10 a barrel in London.
The Labor Department reported that the number of people who applied for unemployment benefits dipped slightly last week. Applications fell by 9,000 to 397,000. That's the lowest level in five weeks. And the Commerce Department said factory orders rose in September. A key category that tracks business investment had the biggest jump in six months.
In a move that surprised markets, the European Central Bank cut its benchmark interest rate to 1.25 percent from 1.5 percent. The aim is to keep European economies from falling into recession. Low interest rates make it cheaper for businesses to borrow money to invest in new factories, materials, technology and jobs. When economies grow, demand for gasoline, diesel and jet fuel rises as people travel more and businesses ship more goods.
Oil prices and stock markets also rose on news that a plan to tackle the European debt crisis might not be put to a vote in Greece that could scuttle the deal.
"This market just lives on the latest headlines coming out of Europe," said Stephen Schork, an independent oil analyst and trader.
Other factors kept oil from rising further, however. The European interest rate cut sent the value of the Euro lower against the dollar. Because oil is priced in dollars, when the dollar rises oil becomes more expensive to foreign buyers, and therefore less attractive.
Also, an indicator of Chinese manufacturing activity suggested economic growth in China was slowing. Rising oil demand in China and other developing nations has helped push oil prices higher in recent months.
The national average retail price of gasoline fell about half a cent to $3.426 per gallon, according to AAA, Wright Express, and Oil Price Information Service.
In other energy trading in New York, heating oil rose 2 cents to $3.0183 per gallon, wholesale gasoline fell a penny to $2.6173 per gallon and natural gas rose 5 cents to $3.80 per thousand cubic feet.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey
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