Oil prices jump nearly $3
Saturday, 02 August 2008

AP, NEW YORK-- Oil prices jumped almost $3 a barrel Friday, erasing losses from the previous session after a rally in gasoline futures and a drop on Wall Street drew investors back into energy markets.

But prices at the pump fell again, with a gallon of regular gas slipping on average just over a penny to $3.898, according to auto club AAA, Oil Price Information Service and Wright Express.

Gas is down 5.2 percent from record high of $4.114 a gallon reached July 17, as high prices eat into demand.

Light, sweet crude rose $2.71 at $126.79 a barrel on the New York Mercantile Exchange after earlier rising to $128.60, its highest level in nine sessions. Prices fell $2.69 to settle at $124.08 on Thursday.

Oil soared apparently after a surprise spike in gasoline futures energized oil markets, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill. Unexplained jumps in gasoline futures usually suggest that a refinery somewhere is experiencing a slowdown in operations, perhaps from malfunctioning equipment, he said.

Gasoline for September delivery rose 7.65 cents, or 2.49 percent, to $3.1473 a gallon on the Nymex.

Oil was also getting a boost as stocks fell on news that jobs fell for the seventh straight month and that General Motors Corp. had its third-worst quarterly loss ever. In addition, the Institute for Supply Management said its manufacturing index fell slightly from June's reading, but came in better than economists expected.

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