Oil prices ended higher Thursday after an initial retreat as investors put a positive spin on reports about jobs, manufacturing and home sales.
Benchmark oil for October delivery rose $1.11 to settle at $75.02 a barrel on the New York Mercantile Exchange. Prices dropped as low as $73.11 earlier in the session.
Meanwhile, the national average for a gallon of unleaded regular gasoline was $2.676 on Wednesday, according to AAA, Wright Express and Oil Price Information Service. That's about 5 cents less than a month ago and 7.4 cents higher than a year ago.
The Labor Department said first-time claims for unemployment benefits fell slightly last week, but are still above levels in a healthy economy.
The National Association of Realtors said the number of Americans who signed contracts to purchase previously owned homes rose 5.2 percent in July. That was 19 percent below the same month last year and home sales remain at the lowest level in more than a decade.
One brighter spot: Factory orders rose 0.1 percent in July, indicating some industrial growth.
PFGBest analyst Phil Flynn said the numbers were mixed, and he thinks many energy traders are waiting for Friday's monthly unemployment report, a key indicator, to get a clearer picture of the economy.
"I think we're going to see a lot of caution ahead of those numbers," he said.
Natural gas prices fell after the government said inventories increased by 54 billion cubic feet to about 3.106 trillion cubic feet last week. The total was 6.3 percent lower than year-ago levels but about 5.8 percent more than the five-year average.
Natural gas for October delivery lost 1.1 cents to settle at $3.751 per 1,000 cubic feet.
In other Nymex trading in October contracts, heating oil added 2.12 cents to settle at $2.0623 a gallon and gasoline gained 3.25 cents to settle at $1.9216 a gallon.
In London, Brent crude rose 58 cents to settle at $76.93 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Hungary and Alex Kennedy in Singapore contributed to this report.
(This version corrects heating oil settlement price.)
WASHINGTON – Congress seems increasingly reluctant to let taxes go up, even on wealthier Americans.
Worried about the fragile economy and their own upcoming elections, a growing number of Democrats are joining the rock-solid Republican opposition to President Barack Obama's plans to let some of the Bush administration's tax cuts expire.
Democratic leaders in Congress still back Obama, but the willingness to raise taxes is waning among the rank and file as the stagnant economy threatens the party's majority in the House and Senate.
"In my view this is no time to do anything that could be jarring to a fragile recovery," said Rep. Gerry Connolly of Virginia, a first-term Democrat.
The most sweeping tax cuts in a generation are due to expire in January, and that's setting up a showdown when lawmakers return from their summer vacations this month. By waiting to act on the tax cuts until just before congressional elections in November, Democratic leaders have raised the stakes, politically and for taxpayers.
If Congress fails to act - a possibility given the gridlock that has gripped the Senate - workers at every income level would face significant tax increases next year.
Taxpayers making between $40,000 and $50,000 a year would get hit with an average income tax increase of $923 next year. Those making between $50,000 and $75,000 would face an average increase of $1,126, according to estimates by the nonpartisan Joint Committee on Taxation.
Obama wants to make the tax cuts permanent for middle- and low-income families while allowing them to expire for individuals making more than $200,000 and married couples making more than $250,000.
Republicans want to make all the tax cuts permanent, adding nearly $4 trillion to the national debt over the next decade. Most Democrats in Congress support Obama's plan, but a growing number have come out in favor of extending all the reductions for a year or two, leaving the outcome very much in doubt.
"It's going to be hard to resist a one-year extension for everybody, given the state of the economy," said Clint Stretch, a tax expert at the consulting firm Deloitte Tax LLP. "That's where I think the ball is moving."
The tax cuts were enacted in 2001 and 2003 under President George W. Bush. They provided help for both rich and poor, reducing the lowest marginal rates as well as the top ones and several in between. They also provided a wide range of income tax breaks for education, families with children and married couples.
Taxes on capital gains and dividends were reduced, while the federal estate tax was gradually repealed, though only through this year.
Connolly said the nation cannot afford to make all the tax cuts permanent, which would add about $3.9 trillion to the national debt over the next decade according to updated estimates from the nonpartisan Congressional Budget Office.
"I would say certainly a year, until we feel more confident about the economic growth of this economy," he said.
Another freshman Democrat, Rep. Bobby Bright of Alabama, said he would like to see all the tax cuts extended for two or three years, if lawmakers cannot agree on a more permanent plan.
"Party leaders are not my directors or my boss," Bright said. "My boss is my constituents, and I've heard from a vast majority of my constituents that they don't believe in tax increases on anybody at this point in time."
Bright is high on the re-election endangered list, one of roughly four dozen Democrats in districts won by Republican presidential nominee John McCain in 2008.
In the Senate, where Democrats need unity and at least one Republican vote to overcome filibusters, at least three Democrats and independent Joe Lieberman of Connecticut have said they want to extend all the tax cuts temporarily.
Several Democratic candidates for Senate have also come out in favor of extending them all, including Robin Carnahan in Missouri and Jack Conway in Kentucky.
"Jack Conway was in favor of the Bush tax cuts when they first passed (in 2001 and 2003), and he's in favor of extending the Bush tax cuts now," said spokeswoman Allison Haley.
Obama first staked out his position on taxes during the presidential campaign, and his administration has been adamant that the nation cannot afford to extend the reductions for top earners.
Obama's plan would let taxes increase by a little more than $38 billion next year, with nearly 80 percent of the increase falling on families making more than $1 million, according to the Joint Committee on Taxation.
Taxpayers making between $200,000 and $500,000 would face an average tax increase of $532, according to the analysis. Those making from $500,000 to $1 million would average an increase of a little more than $9,800. Taxpayers making more than $1 million would average an increase of just over $95,000.
This week, White House economic adviser Jason Furman said it would be a bad idea to extend tax cuts for the wealthy, even for just a year, because it would open the door to making them permanent. Last week, Vice President Joe Biden said Republican claims that small businesses would be hurt by the proposed tax increase are a "bunch of malarkey."
On Thursday, White House spokesman Robert Gibbs said extending cuts for the wealthy would do little to improve the economy.
"We are focused first and foremost and only on extending tax cuts for the middle class," Gibbs said.
BRUSSELS (AFP) – Europe took a big step closer on Thursday to its goal of creating cross-border financial supervisors, reaching a "crucial milestone" in efforts to reform a sector blamed for the global recession.
EU states, the European Commission and European lawmakers reached a deal in principle to establish three agencies that will oversee banks, insurers and the markets, European Internal Market Commissioner Michel Barnier said.
The agreement also creates a European Systemic Risk Board which would look out for threats to the region's economy following months of negotiations.
"We have reached a crucial milestone," Barnier said. "We have reached a political consensus on the creation of a European financial supervisory framework."
The deal must be approved by EU finance ministers meeting in Brussels on Tuesday and the European parliament sometime this month. The EU hopes to launch the new agencies in January.
Europe is lagging behind the United States in efforts to regulate the financial sector as President Barack Obama signed into law in July the most sweeping reform of Wall Street since the 1930s.
Negotiations between EU states and lawmakers resumed this week after they had stalled in July as the two sides locked horns over how much power to give to the new agencies.
European states reached their own compromise in late 2009 despite reluctance from Britain to grant too much authority to the new agencies.
"The fact is that we did not see the crisis coming. We did not have the monitoring tools to detect the risk which was accumulating across the system. And when the crisis hit, we did not have effective tools to act," Barnier said.
The new bodies will give Europe "the control tower and the radar screens needed to identify risks, the tools to better control financial players and the means to act quickly, in a coordinated way, in a timely fashion," he said.
Oversight of the financial sector is in the hands of national supervisors.
Britain, home to one of the world's biggest financial centres in London, has insisted that decisions of the pan-European agencies should never interfere with a state's fiscal sovereignty.
London fought to limit the ability of the European agencies to intervene in a crisis by obtaining the right to appeal their decisions. European lawmakers believed this mechanism would weaken the supervisors but a compromise was reached on Thursday that would prevent any "abuse" of the safeguard, negotiators said.
Britain, which is not a member of the euro single currency area, was also reluctant to make the president of the European Central Bank the head of the systemic risk board.
But negotiators agreed to make the ECB chief, Jean-Claude Trichet, head of the board for five years, although the next appointment would be up for discussion.
A British government spokesperson welcomed the deal, saying it was "a very good outcome for the UK, fully reflecting the priorities secured by" finance minister George Osborne.
The negotiators for the parliament's Socialist bloc, Udo Bullmann, Peter Skinner and Antolin Sanchez Presedo, said European leaders must now move forward on plans to regulate risky financial instruments.
"By designing this new architecture, the EU has made a huge step forward in avoiding any new financial crisis," they said in a joint statement.
"Nevertheless, more needs to be done. We expect European leaders to show the same level of ambition in securing a deal to regulate hedge funds and private equity as well as the markets for derivatives," they said.