NEW YORK – Retail gasoline prices rose Monday and oil prices rallied to the highest level in two months before falling back to settle lower with the retreating stock market.
Benchmark crude for November delivery lost 11 cents to settle at $81.47 a barrel on the New York Mercantile Exchange. Earlier in the day it rose to $82.38, the highest level since Aug. 6.
At the pump the national average for a gallon of regular rose to $2.732, according to the Energy Information Administration's weekly report on retail gas prices. That's 3.8 cents higher than a week ago and 26.4 cents above a year ago.
Pump prices in major U.S. cities range from around $3 a gallon in Los Angeles, San Francisco and Seattle to about $2.81 in Miami, $2.72 in Cleveland, $2.70 in New York, $2.65 in Boston and $2.53 in Houston.
Analysts say gasoline has been tugged higher by oil prices, which rose recently on a strong Chinese manufacturing report and continued pledges by the Federal Reserve to keep interest rates low. There also were reports over the weekend that the Houston Ship Channel will remain closed due to a damaged electrical tower. That could crimp supplies.
While gasoline demand perked up in September, it's still not strong enough to support rising prices in the final three months of the year, according to Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. "People are driving less than they were last year, so you're not going to see prices rocketing higher," he said. "I wouldn't be surprised if you're paying less for gas on Thanksgiving Day than you will be on Columbus Day."
Energy traders have been watching stock prices as indicators of consumer sentiment about the recovering economy. Stocks pulled back Monday, with the Dow Jones Industrial Average closing down more than 78 points. The NASDAQ and the S&P 500 were lower as well. Analysts said a stronger dollar and downgrades of some key stocks, like Microsoft, convinced investors to pocket profits made in the market last month.
In other Nymex trading, heating oil fell 0.91 cent to settle at $2.2847 a gallon, and gasoline rose 0.72 cent to settle at $2.0933 a gallon. Natural gas dropped 7 cents to settle at $3.727 per 1,000 cubic feet
In London, Brent crude gave up 47 cents to settle at $83.28 per barrel on the ICE Futures exchange.
____Associated Press writers Pablo Gorondi in Budapest, Hungary and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.