NEW YORK – Oil resumed its march to $90 a barrel on Monday, promising to bring retail gasoline prices along for the ride.
Benchmark crude rose 82 cents to settle at $88.61 per barrel on the New York Mercantile Exchange. At the pump, the average price for a gallon of regular around the country was $2.98, according to the Energy Department's Energy Information Administration. That's over two cents higher than a week ago and 38 cents above a year ago.
In major cities, pump prices range from $3.30 a gallon in San Francisco to $2.72 in Denver. Drivers in Seattle pay $3.16 a gallon. Gas is $3.11 a gallon in New York City, $3.07 in Miami, $3.05 in Chicago, $3.01 in Boston, $2.94 in Cleveland and $2.79 in Houston.
Oil prices bounced back on Monday following OPEC's weekend meeting In Ecuador, where oil ministers said they would keep production quotas unchanged. Even though that was expected, oil traders were glad to have it confirmed. "The market is focusing ... on the lack of desire to add more oil to quash higher prices," JP Morgan analysts said in a note to investors.
While higher oil prices put more money in OPEC pockets, oil-producing countries worry that prices could go too high, fan inflation and slow the global economic recovery. "The ministers generally love existing prices," energy consultants Cameron Hanover said in a report. "Some insiders have hinted at a quota increase if crude oil prices break above $100 a barrel."
Oil prices were also helped on Monday by a weaker dollar. Oil and other commodities are priced in dollars, so they become more attractive to buyers with foreign currency as the dollar retreats.
The energy markets are watching the Senate vote on extending tax cuts. The bill would also extend unemployment benefits and reduce Social Security payroll taxes for a year, all of which are seen helping the economic recovery. As the economy recovers, demand for oil and gas is expected to improve as well.
In other Nymex trading, heating oil added 0.77 cent to settle at $2.4652 a gallon. Gasoline gained 0.91 cent to settle at $2.3184 a gallon. Natural gas picked up 0.3 cent to settle at $4.420 per 1,000 cubic feet.
In London, Brent crude rose 71 cents to settle at $91.19 per barrel.