Oil prices stay above $90 a barrel on Chinese growth hopes, Europe data; gas prices drop again

NEW YORK, N.Y. – The price of oil got a boost from rising stock markets Tuesday, but traders said that declines that sent oil to its low for the year on Monday will likely resume.

Benchmark West Texas Intermediate oil for April delivery was up 21 cents to US$90.33 a barrel in morning trading on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 63 cents to US$110.72 a barrel on the ICE Futures exchange in London.

Global stock markets rallied as Chinese Premier Wen Jiabao confirmed the country’s annual growth target of 7.5 per cent and retail sales rose in Europe. In the U.S., the Dow Jones industrial average shot to a record high.

Oil has dropped about 7 per cent over the past five weeks. Monday’s temporary decline in crude prices to below US$90 a barrel was attributed to the introduction in the U.S. of US$85 billion in automatic government spending cuts, which could hurt the world’s leading economy.

Lower oil prices have helped push down prices at the gas pump. The average price for a gallon of gas fell a penny overnight to $3.74, and is now 3 cents cheaper than a year ago.

Some traders think Tuesday’s oil trading represents a pause in a downward trend.

“The ability of Brent and WTI to rebound back to above US$110 and US$90 suggests to us a bear market that could be in a pause for a while before resuming a decline that could carry down to about the US$104 and US$85 areas within the next week or two,” said Jim Ritterbusch of the energy consulting group Ritterbusch and Associates.

As this week goes along, oil traders will be monitoring fresh information on U.S. supplies of crude and refined products and the latest government data on hiring.

In other energy futures trading on the Nymex:

— Wholesale gasoline added 2 cents to US$3.11 a gallon (3.79 litres).

— Heating oil rose 3 cents to US$2.95 a gallon (3.79 litres).

— Natural gas gained 3 cents to US$3.55 per 1,000 cubic feet.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)

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Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.