Crude Oil Finishes Higher

NEW YORK (TheStreet) -- Crude oil futures settled Monday's trading session much higher on bullish manufacturing data, curbed concerns about Dubai's debt crisis and fears that an errant yacht could strain ties between the West and Iran, one of the world's largest oil producers.

The January delivery contract for light, sweet crude spiked as high as $78 a barrel following reports Monday afternoon that a British crew had been detained in Iran after their racing yacht drifted into Iranian waters, according to the British Foreign Secretary. The contract settled Monday's session up by $1.23, or 1.6%, at $76.05.

Earlier in the day, oil prices drifted in and out of green territory as investors weighed improved Midwestern manufacturing activity in November, as demonstrated by the Chicago purchasing managing index's rise to 56.1, its highest level in over a year.

Also helping oil prices on Monday, the Energy Information Administration reported higher oil demand in September -- the first increase since 2007. Oil demand rose 2.9% in September and gasoline consumption rose by 4.7% from a year ago, according to the U.S. Energy Department.

On the Nymex, the January delivery contract for gasoline gained 6 cents, or 2.9%, to $2.01 a gallon and the heating oil contract for January delivery added 4 cents, or 1.9%, to $2.05.

Late Monday, the Energy Information Administration released its monthly natural gas report for November, which showed the year's consumption to be down by 3% compared with the same period a year ago. Withdrawals during the 2009 heating season, which spans from November to March, were 13.4% lower than in 2008 and injections were 48.6% higher, indicating weak demand. Natural gas for January delivery lost 34 cents, or 6.6%, to settle Monday at $4.85.