| GEO Business|
| Oil prices higher on positive US data|
| Updated at: 0306 PST, Wednesday, September 16, 2009|
LONDON: Oil prices were mostly higher Tuesday as the market digested positive US economic data pointing to recovery in the world's largest energy consumer.
New York's main contract, light sweet crude for October delivery, leapt 2.07 dollars to finish at 70.93 dollars a barrel, after two daily declines.
In London, Brent North Sea crude for October delivery drifted nine cents lower to settle at 67.35 dollars a barrel.
In New York, "market participants looking for directional cues from the (US) producer price index and retail sales readings have concluded that the data are supportive for oil prices," said Mike Fitzpatrick of MF Global.
Action came after official data showed that US retail sales leapt a stronger-than-expected 2.7 percent in August from July, led by the government's popular "Cash for Clunkers" rebate program that boosted car sales.
In a separate report, the US government said a surge in energy costs pushed up US producer prices 1.7 percent in August as inflation at the wholesale level turned positive, after a 0.9 percent decline in July.
"All of those data pushed the price of crude higher as they showed more potential for growth," said Jason Schenker of Prestige Economics.
Federal Reserve chairman Ben Bernanke added to the upbeat tone, declaring the US recession, which began in December 2007, "is very likely over" technically but that the economy remained weak due to difficult credit conditions and high unemployment.
MF Global's Fitzpatrick cautioned that "while there seems to be general agreement that recovery is underway, a return to pre-recession economic performance is still a long way off."
Traders also digested news that the OPEC oil producers' cartel lowered slightly its forecast for lower crude demand this year, but maintained its projection of a modest recovery in 2010.
World oil demand will decline slightly in 2009 but start growing again next year, OPEC said Tuesday in a monthly report.