NEW YORK — The price of oil shot to a 16-month high Thursday on signs the U.S. job market is improving, although not by enough to prompt the Federal Reserve to pull back on its bond-buying program.
By early afternoon in New York, benchmark crude for August delivery was up $1.35 to $107.83 a barrel. Earlier, the price topped $108 a barrel for the first time since March 23, 2012.
Oil has jumped more than $11 a barrel in July, and dragged the price of gasoline along with it. U.S. gasoline futures have gained about 13 percent since July 1.
On Thursday, U.S. economic news was good on two fronts: The Labor Department reported a drop in claims for unemployment benefits and the Federal Reserve Bank of Philadelphia said manufacturing activity in the mid-Atlantic region grew in July at the fastest pace in more than two years.
Oil markets are also getting support this week from comments by Ben Bernanke that the Fed will support the U.S. economy as long as necessary. The Fed chairman told lawmakers in appearances Wednesday and Thursday that there was no preset schedule for ending the existing stimulus program, raising hopes it may not end as quickly as some had feared.
In London, Brent crude rose 5 cents to $108.66 a barrel on the ICE Futures exchange.
In other energy futures trading on the New York Mercantile Exchange:
— Wholesale gasoline fell 1 cents to $3.10 a gallon.
— Heating oil rose 2 cents to $3.10 a gallon.
— Natural gas added 18 cents to $3.81 per 1,000 cubic feet.
AP Writer Pablo Gorondi in Budapest contributed to this report.