THE price of oil rose slightly yesterday, as optimism about the US economy helped erase some early losses.

US benchmark crude for September delivery rose 10 cents to close at US$105.49 a barrel on the New York Mercantile Exchange. Oil fell as low as US$104.08 before recovering.

Orders for long-lasting US factory goods rose in June. The increase suggests companies are more confident in the economy and could boost economic growth in the second half of the year.

The report helped "to conjure up images of increased petroleum demand from the US industrial sector," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, in a note to clients.

Brent crude, which is traded on the ICE Futures exchange in London, rose 46 cents to finish at US$107.65 a barrel.

In other energy futures trading on the Nymex:

- Gasoline fell 4 cents to US$3.02 a gallon.

- Heating oil lost 1 cent to end at US$3.04 a gallon.

- Natural gas retreated by 5 cents to finish at US$3.64 per 1,000 cubic feet.