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Oil rises above US$68

CRUDE prices rallied this week as the Dow Jones industrial average increased 11 percent in the last nine days and passed the 9,000 mark for the first time since January.

Benchmark crude for September delivery rose 89 cents to settle at US$68.05 a barrel yesterday on the New York Mercantile Exchange.

Meanwhile, gasoline futures on Nymex have risen every day since July 13 and prices have jumped 28 cents in less than two weeks.

Like gasoline futures, crude moved higher this week as the stock market rallied and companies reported strong second-quarter earnings.

"We haven't seen demand increase yet, but all the good news about the economy seems to be adding fuel to the fire," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. "Just the fact that things are improving is enough to change the sentiment of a lot of people."

Most second-quarter corporate results have beaten analyst expectations, but reports late Thursday from Microsoft Corp., American Express Co. and disappointed investors, giving a mixed picture about a recovery.

The Organization of Petroleum Exporting Countries says it's concerned about the build in gasoline supplies in the U.S., and how that may eventually force crude prices lower than its members want. The group was able to cinch production earlier this year and prices rebounded, but some members have losened the spigots for badly needed cash.

OPEC crude production increased in April, May and June, according to the organization's July report.

In that period, Angola leapfrogged Nigeria as Africa's largest oil producer. Nigeria's production has been slowed as militants atack its energy infrstructure.

In other Nymex trading, gasoline for August delivery added less than a penny to settle at US$1.9159 a gallon and heating oil rose 1.69 cents to settle at US$1.7813 a gallon. Natural gas for August delivery jumped 14.5 cents to settle at US$3.695 per 1,000 cubic feet.

In London, Brent prices rose US$1.07 to settle at US$70.32 a barrel on the ICE Futures exchange.


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