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Policy: Environment & Energy

Oil above $97 following solid European data

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Associated Press,Economy,Federal Reserve,Energy and Environment,Oil,Europe

The price of oil rose above $97 a barrel Monday, supported by a survey pointing to a modest economic pick-up in Europe and the continued closure of export terminals in Libya.

By early afternoon in Europe, benchmark U.S. crude for January delivery was up 73 cents to $97.33 a barrel in electronic trading on the New York Mercantile Exchange.

A survey of the 17-country eurozone showed business sentiment across the region rising for the first time in three months despite renewed weakness in the French economy. The monthly purchasing managers' index for the eurozone from financial information company Markit rose to 52.1 in December from 51.7 in November, after two month straight declines. Anything above 50 indicates expansion.

The main focus in oil markets, as in others, is the U.S. Federal Reserve's decision Wednesday on whether to maintain its $85 billion in monetary stimulus. There are growing expectations that the Fed could decide to start cutting back on the stimulus following some recent strong U.S. economic data reports and signs of an imminent budget agreement in Congress.

Any reduction of stimulus could result in a stronger dollar, making commodities priced in the greenback more expensive to foreign buyers, driving down demand.

Brent crude, a benchmark for international oils, was up $1.85 to $110.17 a barrel on the ICE Futures exchange in London.

Brent's strong advance was due to news from Libya that oil terminals shut for months and expected to open last weekend would remain closed. A militia from eastern Libya controlling the export hubs said the central government in Tripoli had failed to meet its demands, mainly a share of oil revenues.

In other energy futures trading on the Nymex:

— Wholesale gasoline rose 4.09 cents to $2.6847 a gallon.

— Heating oil added 5.32 cents to $2.983 a gallon.

— Natural gas dropped 14 cents to $4.211 per 1,000 cubic feet.

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