NEW YORK (AP) — 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 oil for April delivery was up 21 cents to $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 $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 percent 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 percent over the past five weeks. Monday’s temporary decline in crude prices to below $90 a barrel was attributed to the introduction in the U.S. of $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 $110 and $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 $104 and $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.