Oil prices rise near $87 as recession fears ease (AP)

NEW YORK ? Oil prices climbed to near $87 per barrel Friday as encouraging economic news in the U.S., China and Europe raised hopes that the global economy won't fall back into recession.

Benchmark crude rose $2.35, or 2.8 percent, at $86.58 per barrel in New York. Brent crude, which is used to price oil from foreign countries, rose $2.87, or 2.6 percent, to $113.98 in London.

Prices jumped after China said its inflation rate dropped last month, giving Chinese leaders more room to further stimulate the economy without overheating it.

This week China reported a slowdown in exports, raising concerns that sluggish demand from the U.S. and Europe was taking a toll on world's second-largest economy. But with low inflation, analysts said China has the ability to ease limits on bank lending to keep its economy growing.

In the U.S., consumers spent more on cars, clothing and furniture last month. Consumer spending, which drives the U.S. economy, pushed retail sales up 1.1 percent in September, the biggest gain in seven months.

Financial leaders of the world's largest economies were meeting in Paris to discuss how to resolve Europe's debt crisis. The Group of 20 is expected to address ways to save Greece from bankruptcy and kick-start European economies.

"You're seeing one big sigh of relief" across world financial markets, independent analyst Jim Ritterbusch said. "Three weeks ago, it looked like we were definitely headed for a recession."

Meanwhile, gasoline pump prices rose for a fourth straight day, by nearly 2 cents, for a national average of $3.443 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is at a record high for this time of year.

In other energy commodities trading, heating oil rose 8 cents to $3.0529 per gallon and gasoline futures increased 6 cents to $2.8132 per gallon. Natural gas rose 8 cents to $3.612 per 1,000 cubic feet.

Chris Kahn can be reached at http://twitter.com/ChrisKahnAP

Source: http://us.rd.yahoo.com/dailynews/rss/energy/*http%3A//news.yahoo.com/s/ap/20111014/ap_on_bi_ge/oil_prices

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