Oil Prices Hit $80 on U.S. Economy Optimism

Oil prices rose above $80 a barrel Monday in Asia on optimism a gradual U.S. economic recovery in 2010 will boost demand for crude.

Benchmark crude for February delivery was up 93 cents at $80.29 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 8 cents to settle at $79.36 on Thursday. Trading was closed Friday for the New Year holiday.

Oil has flirted with the $80 level the last two trading days after jumping from $69 a barrel last month on signs the U.S. economy may be improving. The unemployment rate fell to 10 percent in November from 10.2 percent in October, and the government is scheduled to announced December's results later this week

"Most people expect the economy to get better this year, and demand should follow," said Victor Shum, an analyst with consultancy Purvin & Gertz in Singapore. "But traders so far lack the conviction to trade oil above $80 for long simply because of there haven't been clear indications of growing demand yet."

Colder weather has also lifted crude prices recently by boosting demand for heating oil, Shum said.

Oil prices rose 78 percent last year.

In other Nymex trading in February contracts, heating oil rose 2.31 cents to $2.14 a gallon and gasoline gained 2.38 cents to $2.08 a gallon.

In London, Brent crude for February delivery rose 97 cents to $78.90 a barrel on the ICE Futures exchange.