Oil price rises to $100 a barrel again

November 29, 2011 - 8:55 PM

NEW YORK (AP) — A rebound in U.S. consumer confidence and escalating tensions in Iran pushed oil to $100 per barrel on Tuesday.

The price of benchmark crude rose $1.58 to end the day at $99.79 per barrel in New York. It rose as high as $100.15 a barrel earlier in the session.

Oil prices jumped early in the day after a private survey found that U.S. consumer confidence rose this month to the highest level since July. The Conference Board survey followed robust retail sales over the Thanksgiving weekend. The U.S. is the world's largest oil consumer, and its economy is driven by consumer spending.

A surge of violence in Iran also helped boost oil prices. Students angered at sanctions against Iran for its nuclear program stormed the British embassy in Teheran and other British diplomatic sites before police restored order. Iran is the world's third-largest oil exporter. While analysts say it's unlikely that Western nations would impose an embargo on Iranian oil, the potential for more violence in the country could keep prices up.

"It's a little frightening, especially for anyone who remembers the Iranian revolution," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. From November 1979 until January 1981, 52 American were held hostage after students overran the U.S. embassy in Iran.

Meanwhile, European leaders continued to work on a last-minute strategy to save the euro and prevent a eurozone collapse that could send the region into recession.

While traders kept a wary eye on Europe and Iran, analysts said the consumer confidence numbers in the U.S. show the American economy is on stronger footing. That bodes well for future oil demand.

"Everyone's really focused on the holiday shopping," independent analyst and trader Stephen Schork said. "It's pushed the European situation to the back seat."

Growing consumer spending should boost energy demand for shipping companies and other major U.S. industries. But motorists are still conserving fuel, according to a study released Tuesday by MasterCard SpendingPulse. Its analysis of gasoline purchases shows that American drivers have cut way back this year. Motorists bought an average of 369 million gallons of gasoline per day during the four-week period that ended Nov. 25. That's down 4.1 percent from a year ago.

At the pump, retail gasoline prices were steady Tuesday at a national average of $3.295 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 15 cents cheaper than a month ago, but it's still nearly 44 cents higher than the same time last year.

In other energy trading, heating oil rose 5.12 cents to finish at $3.0211 per gallon, while gasoline futures increased 2.1 cents to end the day at $2.5391 per gallon. Natural gas rose 10.8 cents to finish at $3.633 per 1,000 cubic feet.

Brent crude, which is used to price many kinds of foreign oil, rose $1.84 to end at $109.86 a barrel in London.

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Chris Kahn can be reached at http://twitter.com/ChrisKahnAP .