Oil rises above $70 a barrel

CRUDE oil rose above $70 a barrel in New York as robust economic growth in the US and China, the two biggest oil consumers, may bolster fuel demand.

A report from the Federal Reserve Bank of New York suggested that manufacturing in the state is rebounding. First-time claims for unemployment benefits in the US fell last week, a separate report showed. Chinese industrial output rose 17.9% in May, the most in two years, a government report showed yesterday. The US and China consume 33% of the world’s oil.

“We’ve been trending higher but prices picked up with the release of economic data,” said Jason Schenker, an economist at Wachovia Corp in Charlotte, North Carolina. “Increased economic growth implies stronger fuel demand.”

Crude oil for July delivery rose 96 cents, or 1.4 percent, to $70.10 a barrel at 10:50am on the New York Mercantile Exchange. Prices are up 26% from a year ago. Oil reached $75.35 on April 21 and 24, the highest since New York trading began in 1983. Futures touched $68.109 yesterday, the lowest since May 22.

“Prices pulled back on economic jitters but it now appears that some of those worries were overblown,” said John Kilduff, vice president of risk management at Fimat USA in New York.