Oil prices extend rise above $93 a barrel

Oil up on market gains, supply worries, as Venezuela continues to battle with Exxon Mobil.

Oil prices extended their modest rise Thursday, supported by Wall Street's overnight gains and threats to U.S. oil supplies.

Wall Street rallied Wednesday after the U.S. Commerce Department said retail sales rose unexpectedly last month. Energy investors often view the equity market as a barometer of economic health, worrying that any slowdown in growth will lead to a corresponding slump in energy demand.

Traders also remain concerned about Venezuelan President Hugo Chavez's threat to halt oil sales to the United States in response to Exxon Mobil Corp.'s bid to freeze billions of dollars in Venezuelan assets. Exxon Mobil is challenging the nationalization of its Venezuelan oil ventures in U.S. and European courts.

A federal judge in New York on Wednesday confirmed the freezing of $300 million in cash held by Venezuela's state-run oil company, finding it probable that Exxon Mobil will win its legal battle against the company.

But Venezuelan Oil Minister Rafael Ramirez vowed earlier in the day to defeat Exxon Mobil in its legal battle with Petroleos de Venezuela SA, which has threatened to halt crude sales to the U.S. oil company

"We're going to come out of this battle successful," Ramirez told a rally of oil workers in the eastern state of Anzoategui. "Exxon Mobil isn't pleased with our government. It matters little to our government what Exxon Mobil thinks."

Light, sweet crude for March delivery rose 19 cents to $93.46 a barrel in in electronic trading by late morning in Europe ahead of the opening of floor trading on the New York Mercantile Exchange.

The contract rose 49 cents to settle at $93.27 a barrel on Wednesday.

Brent crude added 78 cents to reach $94.10 a barrel on the ICE Futures exchange in London.

Investors were also heartened by U.S. President George W. Bush's signing Wednesday of the $168 billion economic stimulus package that will send tax rebate checks to millions of Americans.

Oil prices have fallen from a January record above $100 a barrel largely on concerns about economic growth and falling demand for oil and gasoline.

Traders shrugged off a mixed U.S. government inventory report that said crude oil supplies grew 1.1 million barrels last week, less than the expected 2.7 million barrel increase.

The U.S. Energy Information Administration said gasoline inventories rose 1.7 million barrels while inventories of distillates, which include heating oil, dropped 100,000 barrels last week.

Heating oil futures added 0.48 cent to reach $2.6204 a gallon while gasoline prices rose 0.78 cent to $2.3977 a gallon.

Natural gas futures rose 11.2 cents to $8.50 per 1,000 cubic feet.