NEW YORK ? Oil prices are caught between two competing trends in the world economy: Europe faces debt problems that could slow its economy, while developing nations are on track to boost oil demand to a record this year.
Benchmark U.S. crude rose 63 cents to $87.87 per barrel in New York on Monday while Brent, which is traded in London and used to price many international varieties of oil, fell 17 cents to $112.60.
The growing energy needs of China, India and other developing nations will continue to prop up oil prices despite sluggish economic growth in Europe and the U.S., said Andrew Lebow, a senior vice president and oil broker at MF Global.
"No one is predicting that oil demand will shrink," Lebow said.
The Organization of Petroleum Exporting Countries bolstered that notion in its September oil market report, which was released Monday. OPEC said global oil demand will grow to new heights in 2011, although it will be less than expected.
The cartel, which tends to be conservative about demand, said daily world oil consumption should rise to a record 88 million barrels this year and 89.3 million barrels in 2012. While the U.S., western Europe and Japan cut back on oil, China will expand consumption by 6 percent this year, followed by increases of more than 2 percent in Asia, Latin America and the Middle East, OPEC said.
Meanwhile, the European Commission said that Greece's budget shortfall will be more than expected, increasing fears that a default there could spark a slowdown in Europe. Greece's deficit as a percentage of national income is now expected to hit 9.5 percent, up from an earlier estimate of 7.6 percent.
European Central Bank chief Jean-Claude Trichet said European bankers are watching Greece's situation closely. Trichet, who spoke to reporters in Switzerland, added that the global economy doesn't appear to be headed for another recession.
In the U.S., gasoline prices are down less than a penny to $3.649 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 95 cents higher than it was the same time last year.
In other commodities trading, heating oil lost 2.91 cents to $2.9567 per gallon while gasoline futures dropped 2.31 cents to $2.7479 per gallon. Natural gas fell 3.8 cents to $3.877 per 1,000 cubic feet.
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