Energy investors were cheerful ahead of the holiday weekend after the government issued reports that suggested improvement in the U.S. economy.
Drivers got a tiny break in pump prices Wednesday, but they'll still be paying more on Thanksgiving than since gas cost an average of $3.09 on the holiday in 2007.
Oil prices rose more than 3 percent, as did futures for heating oil and gasoline. The good news on the U.S. economy countered recent concerns about an economic slowdown in China, which contributed to lower oil prices over the past 10 days.
Wednesday's government reports indicated Americans spent more in October while jobless claims fell more than expected last week, boosting investors hopes for a stronger economic recovery.
PFGBest analyst Phil Flynn said the combination of the slowing layoffs and improving consumer data offset weak housing numbers. "That's given us hope that maybe, you know, the jobs market may be turning around," he said. The unemployment rate has been stuck at 9.6 percent.
Benchmark oil for January delivery gained $2.61 or 3.2 percent, to $83.86 a barrel in afternoon trading on the New York Mercantile Exchange.
Meanwhile, pump prices fell a notch. The national average for a gallon of unleaded regular gasoline was $2.869 Wednesday, according to AAA, Wright Express and Oil Price Information Service. That's about 2 cents lower than it was a week ago but remained 23 cents higher than a year ago.
On the energy front, commercial inventories of crude oil rose less than expected for the week of Nov. 19.
Gasoline inventories increased 1.9 million barrels. Analysts had expected a decline. U.S. refineries ran at 85.5 percent of total capacity on average, compared with 84 percent in the prior week.
Retail gas prices have increased about 8 percent since Labor Day, driven by a 14 percent gain in oil prices through Nov. 11. They lost 2 cents in a week as oil prices reversed course.
The price of gas could keep falling if refineries continue to add to the current supply, Flynn said.
Natural gas inventories held in underground storage in the lower 48 states fell by 6 billion cubic feet to 3.837 trillion cubic feet for the week ended Nov. 19, the government said. The total was still 9.5 percent more than the five-year average.
Natural gas for December delivery rose 0.3 cent to $4.267 per 1,000 cubic feet. Since the contract expires Wednesday, many traders have moved to the January contract where the price fell 2.7 cents to $4.388 per 1,000 cubic feet.
In other Nymex trading in December contracts, heating oil added 7.59 cents to $2.3255 a gallon and gasoline gained 7.94 cents to $2.2136 a gallon.
In London, Brent crude rose $2.59 to $85.84 a barrel on the ICE Futures exchange.
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