Oil rises above $97 a barrel; US gas prices fall

November 25, 2011 - 12:00 PM

Holiday shoppers driving from store to store in search of discounted toys and televisions and are getting a break at the gas pump.

The average price for a gallon of gas has fallen 7 cents in just a week to $3.31. The discount is 13 cents in the past month. That's because, holiday shopping aside, motorists tend to drive less in the colder months. And refiners are making cheaper winter blends of gas at this time of year.

Meanwhile, Oil continued its up and down week. The U.S. benchmark crude oil rose $1.07 to $97.23 a barrel, tracking the rise in U.S. stock markets. The contract closed Wednesday in New York at $96.17, down $1.84.

Markets in the U.S. were closed Thursday for the Thanksgiving holiday, and will close early Friday on what is certain to be a light trading day.

Oil had fallen earlier as Europe's debt crisis continues to undermine confidence the continent will avoid recession next year.

In London, Brent crude for January delivery fell 50 cents to $106.80 a barrel on the ICE Futures exchange.

Investor concern that fiscal austerity measures aimed at lowering Europe's debt levels will hurt global economic growth and oil demand has helped pull crude back from above $103 last week.

Uncertainty about contagion spreading from Greece to Portugal, Italy, Spain and Ireland has begun to undermine confidence in Germany and France. The yield on Germany's 10-year bond rose above the 10-year UK government bond for the first time since 2009. And late Thursday, Moody's downgraded Hungary's bonds to junk status.

"The eurozone sovereign crisis is starting to threaten the bond markets of even the most solid European economy — Germany," Barclays Capital said in a report.

Gasoline is now cheaper than it has been since February.

The Oil Price Information Service says that U.S. households have spent 8.4 percent of their income on gasoline, up from 6.7 percent in 2010 and 7.9 percent in 2008.

In other Nymex trading, heating oil was flat at $2.97 per gallon and gasoline futures lost half a cent to $2.5165 per gallon. Natural gas added 4.2 cents to $3.65 per 1,000 cubic feet.