Oil finishes lower for the week
Oil ended the day below $83 a barrel on Friday, finishing down about 4 percent for the week. That could spell more relief at the gas pump.
The national average for retail gasoline is $3.59 a gallon, according to AAA, Wright Express and Oil Price Information Service. That's down 10 percent from this year's high of $3.98 on May 5.
Gas could be around $3.25 a gallon by Labor Day and may drop as low as $3.15 by the end of the year, according to Fred Rozell, OPIS retail pricing director.
While gas may be headed lower, it's still taking a big piece out of household income. The median U.S. household income before taxes is almost $50,000 a year. In July families spent about $374 a month on gasoline, or around 9 percent of household income, according to Rozell. For the year, monthly gas expenses average about 8.4 percent, compared with 6.7 percent in 2010.
Benchmark West Texas Intermediate crude for September delivery fell 12 cents to finish at $82.26 per barrel on the New York Mercantile Exchange after earlier rising as high as $83.55 per barrel. It fell back as stocks sold off Friday afternoon. Oil traders have been watching stocks for signs about the direction of the economy.
In London, Brent crude rose $1.63 to end the day at $108.62 per barrel on the ICE Futures exchange.
Benchmark crude is still well above its lowest point in the past year. It finished at $71.63 a barrel last Aug. 24.
PFGBest analyst Phil Flynn thinks traders may have overreacted after oil fell nearly 6 percent Thursday on a batch of negative economic news. He said that traders will remain guarded until there is more clarity about where the economy may be headed.
Crude got some support Friday from a weaker dollar, which hit a new post-World War II low against the Japanese yen. Oil and other commodities are priced in dollars, so a weaker dollar makes them cheaper for traders who use other currencies. Oil lost some ground by the end of the day as the dollar got a little stronger.
In other Nymex trading for September contracts, heating oil rose 2.97 cents to finish at $2.9045 per gallon and gasoline futures added 5.08 cents to end at $2.8412 per gallon. Natural gas rose 4.8 cents to finish at $3.940 per 1,000 cubic feet.