Oil rises for second day on US hopes
OIL rose for a second day as a gauge of US service-industry growth unexpectedly increased, reducing worries that a slowing economic recovery will cut oil demand.
Prices rebounded after the Institute for Supply Management's index of non-manufacturing businesses advanced to 53.7 in May from April's 53.5. Economists surveyed by Bloomberg forecast 53.4. Oil fell earlier as European data signaled the economic outlook is worsening during the region's debt crisis.
"The ISM triumphed over the concerns about Europe," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "The worst news seems to be out already. Now it's time to wait for the recovery."
Crude for July delivery gained 31 cents, or 0.4pc, to settle at $84.29 a barrel on the New York Mercantile Exchange. Prices have fallen 15pc this year.
Prices were little changed after industry-funded American Petroleum Institute said oil inventories fell 1.77 million barrels last week to 384.1 million. The July contract gained 26 cents, or 0.3pc, to $84.24 a barrel in electronic trading..
Brent oil for July settlement slipped 1 cent to $98.84 a barrel on the London-based ICE Futures Europe exchange.