The price of oil rose above $97 a barrel Thursday, as the latest U.S. economic data raised hopes for an increase in gasoline demand but suggested the Federal Reserve can wait to pull back on its current stimulus measures.
Meanwhile, the price of natural gas fell to nearly a 4-month low, and the cost of filling up the family car dropped again as the July Fourth holiday approaches.
The number of Americans seeking unemployment benefits fell by 9,000 to a seasonally adjusted 346,000 last week, evidence that the job market is still improving modestly. Steady job gains could help the economy expand later this year, and would mean more people driving to work.
But the Commerce Department revised downward its estimate of consumer spending for three of the year's first four months. That could signal weaker than expected growth in the April-June quarter. A day earlier the government downgraded its estimate for growth in the January-March quarter to a 1.8 percent annual rate, from a previous estimate of 2.4 percent. The main reason for the revision was consumers spent less than initially estimated.
Tepid growth could keep the Federal Reserve from scaling back its program of bond purchases later this year. The bond purchases have helped keep interest rates low, and encouraged investors to seek better returns in stocks and oil futures.
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Benchmark oil for August delivery rose $1.55, or 1.6 percent, to finish at $97.05 a barrel on the New York Mercantile Exchange. Oil has gained nearly 4 percent this week, after a sharp drop last Thursday and Friday when the Fed signaled it could start curtailing the bond-buying program as early as September if the economy improves enough.
Natural gas futures moved in the opposite direction after the Energy Department said supplies rose more than expected last week. Natural gas fell 16 cents, or 4.1 percent, to end at $3.58 per 1,000 cubic feet. That's the lowest level since March 6. Gas was priced at $4.17 per 1,000 cubic feet just a month ago.
At the pump, the average price for a gallon of gas fell 1 cent to $3.53, the lowest average since May 7. That's 10 cents cheaper than a month ago, although still 15 cents more expensive than at this time last year.
Brent crude, which is used to set prices for oil used by many U.S. refineries to make gasoline, rose $1.16 to finish at $102.82 a barrel.
In other energy futures trading on the Nymex:
Heating oil rose 4 cents to end at $2.89 a gallon.
Wholesale gasoline rose 1 cent to finish at $2.74 a gallon.