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Oil prices near $92 on Spanish budget pledge

Pablo Gorondi, Associated Press

The price of oil crept up above $92 a barrel Friday on hopes the global economy might see some improvement after Spain announced far-reaching steps to fix its ailing economy.

By early afternoon in Europe, benchmark oil for November delivery was up 21 cents to $92.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.87 to finish at $91.85 per barrel on the Nymex on Thursday.

In London, Brent crude gained 78 cents to $112.79 on the ICE Futures exchange.

"Risk appetite improved yesterday on the Spanish budget," analysts at Credit Agricole CIB in Hong Kong said in a market commentary. "With the Spanish budget paving the way for an official bailout request ... renewed concern about the Eurozone crisis has eased."

After three straight days of declines, oil posted gains in Asia on Thursday, helped by expectations the People's Bank of China will soon take more steps to stimulate the world's No. 2 economy. Spain later announced severe budget cuts intended to convince the world that it can meet deficit-reduction targets.

Oil prices also gained support from speculation that Israel was moving closer to military action against Iran's nuclear facilities, after Israeli Prime Minister Benjamin Netanyahu said at the United Nations that Iran would have enough enriched uranium by mid-2013 to build a nuclear bomb.

Still, oil analyst Stephen Schork said he expects "high volatility" as oil contracts for October expire.

In other Nymex trading in November contracts:

— Heating oil rose 0.99 cent to $3.1607 per gallon.

— Wholesale gasoline gained 2.52 cents to $2.9224 per gallon.

— Natural gas rose 0.9 cent to $3.306 per 1,000 cubic feet.


Pamela Sampson in Bangkok contributed to this report.