Oil Closes at New Record; Nears $100 a Barrel

NEW YORK (AP) -- Oil futures resumed their march toward $100 a barrel Friday, rising to a new record close in light holiday trading on concerns about tight heating oil supplies while also drawing support from a buoyant stock market.
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At the pump, meanwhile, gas prices retreated further from their most recent peak, falling 0.1 cent overnight to a national average of $3.086 a gallon, according to AAA and the Oil Price Information Service. Prices rose sharply from mid-October until last week, but have fallen 2.6 cents since, countering predictions that gas prices were destined to add another 10 to 15 cents a gallon to catch up with skyrocketing crude prices.

Analysts now say gas prices are likely to hold steady or even slide a little unless oil rises beyond $100 a barrel.

Oil prices drew support Friday from heating oil futures, which set new records on concerns about tight supplies heading into the winter heating season. Inventories of distillates, which include heating oil, fell sharply last week, the Energy Department reported on Wednesday.

Light, sweet crude for January delivery rose 89 cents to settle at $98.18 a barrel on the New York Mercantile Exchange, besting the previous settlement record by 15 cents, while December heating oil futures rose 1.68 cents to settle at $2.7042 a gallon after earlier setting a new trading record of $2.7181 a gallon.

Crude prices reached a trading record of $99.29 a barrel on Wednesday, and are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
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Heating oil prices are rising due to falling supplies at home and overseas, analysts said.

"The heating oil market, it's more of a global story," said Andrew Lebow, senior vice president of MF Global Inc. in New York. "Because of refinery problems in Europe, (supplies) are kind of tight."

Energy futures also drew support from Friday's rise in the stock market. Energy investors often view stocks as a proxy for the economy's strength, betting that a stronger economy will use more oil and gasoline.



By JOHN WILEN
AP Business Writer