Oil tops US$82

Oil prices rose above US$82 a barrel Tuesday, making for a rare day where energy markets are running opposite to the stock market.

The increase came despite disappointing corporate earnings and consumer spending reports that signalled slower economic growth.

Benchmark crude for September delivery rose 99 cents to US$82.33 a barrel in midday trading on the New York Mercantile Exchange as traders instead took their cue from a weaker dollar.

Stocks retreated after consumer products maker Procter & Gamble Co and Dow Chemical Co reported sales that were lower than Wall Street expected for the second quarter.

Also, the Commerce Department said personal spending was unchanged in June, the third consecutive month of lacklustre consumer demand. Incomes were flat, while consumers saved more money.

Spending on energy goods and services, which includes electricity, natural gas and gasoline, rose 0.9 per cent in June. That compared with a 2.6 per cent increase in May.

And, the National Association of Realtors said pending home sales fell last month.

Oil had stayed within a range of US$70 to US$80 a barrel for most of the summer before it rose above US$81 Monday, despite ample supplies, anaemic demand and mixed reports about the recovery.

It appears traders are buying oil to take advantage of a weaker dollar and low interest rates, Cameron Hanover analyst Peter Beutel said.

Since commodities are priced in dollars, a weaker dollar makes them more attractive to foreign buyers.

"It's a market that is very resilient and it has been shrugging off almost all the bearish news we've been getting," Beutel said.

Investors will be closely watching weekly US crude inventory data on Wednesday and July employment figures Friday.

Analysts expected a drop of 1.2 million barrels in crude inventories, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Stocks expected to decline

US gasolene stocks are expected to decline by 870,000 barrels, while distillate stocks are seen climbing 1.16 million barrels, in line with seasonal tendencies.

In other Nymex trading in September contracts, heating oil rose 3.72 cents to US$2.1910 a gallon, gasolene added 2.3 cents to US$2.1915 a gallon and natural gas gained 5.4 cents to US$4.755 per 1,000 cubic feet.

In London, Brent crude was up US$1.79 to US$82.27 a barrel on the ICE Futures exchange.

- AP