Oil price trading around $80 Friday morning

US Light oil prices hovered above $80 a barrel in early trading on Friday morning in Asia after the US economy snapped four straight quarters of contraction, suggesting demand for crude will improve.

Benchmark crude oil futures for December delivery was up 21 cents to $80.08 a barrel at midday Singapore time in electronic trading on the NYMEX. The contract rose $2.41 to settle at $79.87 on Thursday.

Oil is approaching its high for 2009 of $82 a barrel on evidence the US economy, the world’s largest, is recovering. The Commerce Department said the US economy grew at a 3.5 percent annual pace in the third quarter, the best showing in two years and breaking four straight quarters of declines.

The Dow Jones industrial average jumped 2.1 percent Thursday and all major Asian stock indexes rose in early trading Friday.

“The move higher in oil prices is, in our view, fundamentally justified,” Barclays Capital said in a report. “On the macroeconomic front, so far the path of recovery has surprised to the upside.”

Tags:  light oil prices, oil price, US economy