By PABLO GORONDI Associated Press Writer
Oil prices traded around $59 a barrel on Tuesday as investors booked profits on early gains, when sentiment was buoyed by a global stock rally and signs the U.S. recession is easing. Continued unrest in Nigeria's oil-rich south and a fire at a U.S. oil refinery also supported prices.
Benchmark crude for June delivery was up 2 cents to $59.05 a barrel by mid-afternoon in Europe in electronic trading on the New York Mercantile Exchange. Earlier in the session, prices peaked at $60.48. On Monday, the contract jumped $2.69 to settle at $59.03.
In London, Brent prices fell 14 cents to $58.33 a barrel on the ICE Futures exchange.
Investors on Monday cheered better-than-expected profit reports from home improvement chains Home Depot and Lowe's, an uptick in homebuilder sentiment and positive comments from analysts about U.S. banks - all of which suggested the U.S. economy is gradually emerging from a severe recession. The Dow Jones industrial average jumped 2.9 percent.
On Tuesday, stock indexes rose strongly in Asia and were generally up 1-2 percent in Europe.
While most analysts expect oil prices to increase over the next year as global economic growth recovers, some suspect the recent surge from below $35 a barrel in March may have gone too far, too fast.
"The move from $40 to $60 has happened faster than we thought it would," said Bob Doll, vice chairman of BlackRock, which manages $1.3 trillion of assets. "But a year from now oil prices should be modestly higher than where we are today."
The jump in prices for gasoline and other oil products shouldn't choke off a fledgling recovery in consumer demand since the fall from $147 a barrel in July helped free up extra spending cash, Doll said.
"We've got our eye on it, but we're not overly concerned," he said. "Oil versus a year ago is still down a whole bunch."
Vienna's JBC Energy said the unrest in Nigeria, where the Movement for the Emancipation of the Niger Delta (MEND) militant group threatened to cut off oil tankers' access to key export channels, was still a risk factor for oil prices.
"This would severely reduce the ability for companies to import or export crude oil and petroleum products," JBC said about Africa's biggest crude exporter.
Meanwhile, a fire at Sunoco Inc.'s Marcus Hook refinery in Pennsylvania - ranked 39th by total production out of the 150 U.S. operating refineries - was contained Monday, but the news helped boost gasoline futures.
In other Nymex trading, gasoline for June delivery rose 1.11 cents to $1.7692 a gallon and heating oil gained 1.32 cents to $1.4889 a gallon. Natural gas for June delivery fell 0.9 of a cent to $4.13 per 1,000 cubic feet.
