CRUDE oil and gasoline climbed to records in New York as better-than-expected earnings results signaled a strengthening economy that may boost demand.
United States stocks rallied, capping the best week since February for the Standard & Poor's 500 Index, following earnings reports from companies such as Google Inc and Caterpillar Inc that exceeded analyst estimates. Refineries operated at 81.4 percent of capacity last week, the Energy Department reported.
"The real gloomy scenario has been sort of ameliorated with some of these very positive earnings and the indication that the worst is behind us," John Kilduff, vice president of risk management at MF Global Ltd in New York, told Bloomberg News. "There will be an uptick in energy demand with the renewed economic outlook for the second half of the year in particular."
Crude oil for May delivery rose US$1.83, or 1.6 percent, to settle at US$116.69 a barrel last Friday afternoon on the New York Mercantile Exchange, a record close. Oil touched an all-time high of US$116.97 a barrel at 5:01pm in electronic trading last week.
Prices rose 6 percent last week, the biggest weekly gain since February 2007. They were up 85 percent from a year ago.
Gasoline for May delivery rose 3.15 cents, or 1.1 percent to US$2.9893 a gallon. Earlier, it touched US$2.9934 a gallon.
US Energy Secretary Samuel Bodman said last Friday that the government will continue to buy oil for the Strategic Petroleum Reserve, even with prices over US$100 a barrel. Bodman, who spoke to reporters after a speech in Virginia, said the US needs a 90-day supply of oil in reserve and currently has 55 to 56.
Boone Pickens, a billionaire energy investor, said last week he reversed course and adopted a long position on oil, meaning he is betting the price of crude will rise.
World oil supplies won't exceed 85 million barrels a day because of high depletion rates of existing wells, Pickens, the founder and chairman of Dallas-based BP Capital LLC, said in a speech at Georgetown University.
US fuel consumption fell 1.4 percent in the first quarter, compared with a year earlier, the American Petroleum Institute said last Wednesday.
Deliveries of petroleum products, a measure of demand, declined to an average 20.48 million barrels a day in the quarter, from 20.77 million barrels last year, according to a monthly report from the industry-funded group.