Oil rises in Asia, extending gains above $85 amid signs of US economic strength

Oil gains above $85 on signs of US economic growth

KUALA LUMPUR, Malaysia — Oil prices rose Friday in Asia, adding to gains above $85 a barrel amid signs the U.S. economy is strengthening.

Benchmark crude for June delivery was up 40 cents to $85.57 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.95 to settle at $85.17 on Thursday.

Crude has traded between $87 and $81 this month as traders weighed an improving global economy against stubbornly high U.S. oil inventories, a sign demand hasn’t followed an overall U.S. economic recovery.

This week, more positive economic news from the U.S. helped boost investor optimism. Companies such as Motorola, Time Warner Cable and Starwood Hotels & Resorts reported earnings Thursday that topped forecasts, and the Labor Department said initial claims for unemployment benefits fell last week.

The debt crisis in some European countries — highlighted by Standard & Poor’s credit rating cuts for Spain, Greece and Portugal this week — helped weigh on oil prices.

“Outside Europe, the flow of economic data and news has stayed supportive,” Barclays Capital said in a report.

In other Nymex trading in May contracts, heating oil rose 0.47 cent to $2.257 a gallon, and gasoline added 0.94 cent to $2.365 a gallon. Natural gas jumped 4.5 cents to $4.025 per 1,000 cubic feet.

In London, Brent crude was up 21 cents at $87.11 on the ICE futures exchange.