Updated from 2:16 p.m. ET
Oil prices settled above $71 a barrel Thursday after the government upwardly revised its estimate of first-quarter economic growth.
Light, sweet crude for July delivery climbed $1.46 to close at $71.32 a barrel on Nymex. Gasoline added 8 cents to $2.10 a gallon. Heating oil increased 5 cents to $1.99 a gallon.
Energy stocks advanced on the economic data, with the Amex Oil Index and the Philadelphia Oil Service Index up 3% to 4%.
In a scheduled revision to an earlier estimate, the Commerce Department said gross domestic product, or the total of all goods and services produced, rose at an annual rate of 5.3% in the first quarter. The previous estimate, released last month, pegged growth at 4.8%. Economists, on average, had expected Thursday's revision to show growth of 5.8% in the first quarter.
A closely watched inflation indicator, the core personal consumption expenditures deflator, remained unchanged at 2%. The figure measures the prices consumers pay for all goods excluding food and energy.
The report gives the
some leeway when it meets next month because it could mean inflation isn't rising as much as the bank had feared. Rate hikes matter to energy traders because they could lead to slower economic growth and lower demand for crude.
This year, lingering concerns over the impasse with Iran over its nuclear program, supply cuts in Nigeria, one of the largest U.S. crude suppliers, and reduced production in Iraq have propped up prices 15%. A meeting between some of the U.N. Security Council members on Wednesday was constructive and another meeting will be planned for next week,
Rebels in Nigeria have driven down production in Africa's largest crude exporter by a quarter or 500,000 barrels, much of it from
Royal Dutch Shell
. Nigeria produces light, sweet crude, the priciest and most heavily prized of the different varieties of crude.
Venezuela's moves to gain a larger share of the country's oil wealth has also propped up oil prices and put traders on edge. Officials from Venezuela's state oil company said Thursday they would seek controlling stakes in four heavy oil projects in the country's Orinoco River basin run by foreign oil companies.
Oil firms hit with the changes include
. Earlier this year, higher royalties and taxes were levied on their heavy oil projects.
Poor oil-producing countries like Venezuela and Bolivia have been moving to renationalize or increase their stakes in their oil industries to take advantage of rising energy prices. Earlier this year, Venezuela took over 32 privately-held oil fields and in some cases, refused compensation.
In the latest Energy Department natural gas report, inventories rose by 83 million cubic feet to 2.1 trillion cubic feet last week. Supplies are 29% higher than last year at this time, and 49% over the five-year average. The increase, reported this morning, was inline with a
poll of analysts that called for a 90 million cubic feet increase.
Thanks to a mild winter in the Northeast, there's a supply glut because consumers used less natural gas to heat their homes. Excess inventories have crimped prices this year and compelled numerous utilities and manufacturers to switch over from pricier heating oil to natural gas.
Natural gas tacked on 1 cent to $5.98 per million British thermal units on warm weather predictions for the Midwest over the next two weeks. The current contract for June delivery expires on Friday, which should also inject some volatility into prices.
Meanwhile, in trading Thursday,
and Total were leading the increases on the Amex Oil index, moving nearly 4% higher.
, the country's largest independent refiner, Chevron and Conoco Phillips were among the volume leaders on the New York Stock Exchange, with increases of around 3%.