Oil prices on Monday bounced back above $82 a barrel, as stocks rose on encouraging earnings reports. Benchmark crude for November delivery rose $1.25 to $82.50 a barrel on the New York Mercantile Exchange.
At the pump, gas prices leveled off at a national average of $2.832 for a gallon of regular, down a fraction of a cent from Sunday. After a two-week climb, pump prices are about 10 cents higher than a month ago and nearly 29 cents higher than a year ago. Drivers in California, Alaska and Hawaii pay the most for gas: well over $3 a gallon in most places. The lowest prices are across much of the South, where gas stations charge an average of $2.65 to $2.71 a gallon.
Oil prices got a boost Monday from rising stock prices. The Dow Jones Industrial Average gained about 60 points in late morning trading. Financial shares rose after Citigroup announced better-than-expected earnings. The NASDAQ and the S&P 500 rose as well. A number of major companies report this week, as earnings season begins in earnest. Investors will watch those results for signs of the nation's economic health and the prospects for stronger energy demand.
Enthusiasm for oil broke, at least temporarily, the connection between crude's price and the dollar. The dollar grew stronger Monday as the euro and other currencies retreated. Oil, priced in dollars, can become less appealing to foreign buyers as the dollar rises.
With the Federal Reserve likely to take action next month to keep the economic recovery going, the dollar is likely to fall again and keep oil prices at or above current levels.
"The fundamentals still do not look strong, but suddenly $80 a barrel looks like it may be becoming a new support level rather than a resistance line," said a report from KBC Energy Economics in London.
The Energy Department's weekly report on crude inventories on Wednesday may affect prices as well. Although supplies are abundant, shrinking inventories could support higher prices. Last week's EIA report showed a decline in inventories, but that did not immediately boost oil prices.
