Oil Near $80 On Economic Optimism

(RTTNews) - Oil prices extended gains Friday as optimism prevailed amid data released during the week indicating a speedy economic recovery in the US, the top consumer of oil. Meanwhile, the greenback touched a nine-month high versus the euro.

Crude oil for delivery in March settled $0.75 higher at $79.81 per barrel in the New York Mercantile Exchange. On a weekly basis the price gained over 7%, and is currently at its highest level since mid-January.

The US Labor Department reported Friday its Consumer Price Index rose by a lower than forecast 0.2% in January. The core CPI, which excludes the prices of food and energy, dropped for the first time since 1982. The tame inflation figures affirmed the view that the Federal Reserve may continue to keep interest rates unchanged near zero for an extended period.

The Fed in an unexpected move raised its discount rate by 25 basis points to 0.75% late Thursday.

Thursday, the Energy Information Administration reported a bigger-than-expected 3.1 million rise in US crude inventories in the week ended February 12. But a day earlier, the American Petroleum Institute had reported a decline of 63,000 barrels in crude inventories during the week.

Indicating continued improvement in manufacturing conditions in the mid-Atlantic region, the Federal Reserve Bank of Philadelphia said Thursday its index of manufacturing activity rose to 17.6 in February from 15.2 in the previous month.