Oil, gas prices heading higher

Latest on Gas and Fuel Costs

November 28, 2011 11:02:32 AM PST
Oil prices climbed Monday after shoppers pumped up holiday retail sales in the U.S., and investors bet that Europe would find a last-minute solution to its financial crisis.

The U.S. crude benchmark rose $1.60 to $98.37 per barrel in New York. Brent crude, which is used to price foreign oil varieties including many imported by U.S. refineries, rose $1.82 to $107.58 a barrel in London.

Benchmark oil has recovered much of the ground it lost since Nov. 16, when it hit $102.59 a barrel. Prices rebounded Monday following strong holiday sales in the U.S, where shoppers spent nearly $1 billion more on Black Friday than they did a year ago.

"The U.S. is probably doing better than we gave it credit for," PFGBest analyst Phil Flynn said. "Consumers are buying more, and that's going to get manufacturers to produce more products, and it'll take more energy to make and distribute those goods."

Meanwhile European leaders are considering new solutions to their credit problems, with little time to left to preserve the euro currency. Among the ideas is a plan for eurozone countries with the best credit to pool their resources to assist the most indebted members of the 17-nation currency block. The International Monetary Fund also denied rumors that it's planning a bailout fund for Italy, which is among the countries with big debt woes.

Some analysts say the euro could collapse in days, unless action is taken.

At the gas pump, prices fell less than a penny to a national average of $3.295 a gallon in the U.S., according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 15 cents cheaper than it was a month ago, but it's still more than 43 cents higher than a year ago.

In other energy trading, heating oil rose 4 cents to $2.9802 per gallon, and gasoline futures rose 6 cents to $2.5128 per gallon. Natural gas fell 9 cents to $3.45 per 1,000 cubic feet.