Oil above $82 as recession worries fade for now

[September 30, 2011]  BANGKOK (AP) -- Oil prices inched higher Friday as recession alarm bells quieted following a glimmer of positive U.S. economic news and steps in Europe toward controlling its debt crisis.

Benchmark crude was up 35 cents to $82.50 per barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents to close at $82.14 per barrel in New York.

German lawmakers took a major step toward dealing with Europe's debt crisis Thursday by strengthening a bailout fund for financially strapped countries. That eased worries about Greece, which only has enough money to pay its bills through mid-October.

The country risks a massive default on its debts, an event that could spiral into a financial and banking crisis across the continent. Some experts say a Greek default could lead to a global recession, thus hurting demand for oil.

In the U.S., meanwhile, the Labor Department said the number of people seeking unemployment benefits fell sharply last week by 37,000 to a seasonally adjusted 391,000. That was the fewest since April 2.

Some energy traders viewed the data as a sign that the U.S. was grinding its way out of a slowdown. Others, however, found the data less than convincing.

"While we recognize this is an improvement, we hardly find it encouraging," analysts at the Schork Report wrote. "Initial jobless claims may be at their lowest level since April but, like congratulating the most stable inmate at the insane asylum, this is a heavily modified compliment."

In other energy trading, heating oil rose 1 cent to $2.84 per gallon and gasoline futures fell 6 cents to $2.58 per gallon. Natural gas was up 4 cents at $3.78 per 1,000 cubic feet.

[Associated Press; By PAMELA SAMPSON]

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