Oil futures soared more than 2 percent Tuesday on demand expectations. Light, sweet crude settled up $1.95 at $96.89 a barrel on the New York Mercantile Exchange (NYMEX). Prices for crude oil peaked at $97.48 a barrel.
Barclays Capital raised its 2012 forecasts for Nymex and Brent crude. It forecasts 2012 Nymex crude at $110 a barrel and Brent crude at $115. Barclays claims China, India, Saudi Arabia and Brazil will be the main sources of demand growth in 2012.
Meanwhile, Saudi Arabia's move to reduce the price of August Arab Light oil for its Asian buyers also pressured oil prices Tuesday.
The U.S. Commerce Department reported a 0.8 percent increase in factory orders. According to reports, U.S. businesses ordered more airplanes, automobiles and oil-drilling equipment for the month of May.
Brent crude for August also traded up Tuesday, settling at $113.61 a barrel. The intraday range for Brent crude was $111.23 to $114.34 a barrel.
Front-month natural gas gained nearly 4 cents, ending the trading sessions at $4.36 per thousand cubic feet. Futures rose on warmer weather forecasts. Higher temperatures increase the usage of air conditioning, which in turn increases the demand for natural gas. Natural gas traded between $4.25 and $4.41 Tuesday.
After fluctuating between $2.945 and $3.02, gas prices for the August contract settled at $2.98 per gallon.
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