NEW YORK (AP) — Oil prices rose Tuesday after six straight days of decline as stocks rose and storms delayed oil skimming operations for the big spill in the Gulf of Mexico.
By midday, benchmark crude for August delivery rose $1.24 to $73.38 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average gained about 135 points in morning trading, recouping some losses incurred before the long holiday weekend. U.S. markets were closed Monday for the Fourth of July holiday. The Nasdaq and the S&P 500 were higher on Tuesday as well.
In addition, the dollar weakened. A weaker dollar makes oil and other commodities, which are priced in dollars, more appealing to foreign investors.
Some analysts are slashing oil price projections despite stronger crude demand in emerging economies. Barclays cut its forecast for the average oil price in the fourth quarter to $87 a barrel from a previous estimate of $92 and lowered its prediction for 2011 to $92 from $97.
Investor fears of a double-dip recession in Europe and the U.S. later this year have been weighing on stocks and commodities in recent weeks. A weaker than expected June jobs report on Friday added to concern the U.S. economic recovery could peter out once massive government spending stimulus ends.
A stronger-than-usual hurricane season forecast in the Gulf of Mexico this year may also provide a floor for oil markets.
"Support for oil prices could come from the new storm developing in the Caribbean, which could set course for the Gulf of Mexico," said Commerzbank in Frankfurt.
Others are more optimistic.
"For the moment, despite the growth jitters, it seems to us that both the U.S. and the global recovery will remain intact, and although growth seems to have clearly downshifted a gear or two, we are not looking for a double-dip," MF Global analyst Edward Meir said. He added that he would be surprised if oil prices stayed below $70 for a considerable period.
In other Nymex trading, heating oil rose 3.90 cents to $1.9545 a gallon, natural gas added 17.2 cents at $4.859 per 1,000 cubic feet and gasoline gained 3.86 cents to $2.0163 a gallon.
In London, Brent crude rose $1.34 to $72.81 a barrel on the Futures Intercontinental Exchange.
