NEW YORK — Crude prices edged higher to end the week, despite huge supplies and hundreds of thousands of lost jobs in the U.S.
Prices for oil and gasoline have rallied for weeks on signs that manufacturing activity has picked up across the globe and did so again Friday.
Yet those prices are rising as the job picture grows worse.
By early afternoon, benchmark crude rose 47 cents to $83.13 per barrel on the New York Mercantile Exchange
The U.S. government reported Friday that 85,000 jobs were lost in December. On the same day, UPS, the world's largest package delivery company, said it would cut 1,800 management and administrative jobs.
Energy markets continue to draw in billions of dollars largely because of the weak dollar.
The Labor Department report sent the dollar sharply lower early in the day and because crude is bought and sold in the U.S. currency, anyone holding euros could buy more oil.
Energy experts question how long energy prices can be sustained at the current level with the job picture being what it is.
Nearly 15.3 million people in the U.S. are unemployed, with an increase of 3.9 million people during 2009. That has slashed demand for gasoline and in many households where one or two parents have lost jobs, people are putting on another sweater rather than turning up the heat.
Stockpiles of crude oil, gasoline and distillate fuel oil remain well above levels from last year, according to a report Wednesday by the U.S. Energy Information Administration.
Markets all last year appeared to respond more to the movement of the dollar, however, rather than demand for energy.
"This has been a self perpetuating deal, where strong buying has forced new highs and new highs have forced new buying," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. "It's a vicious cycle,"
U.S. gasoline prices have risen steadily for weeks and that isn't making it any easier for consumers.
The national average price for a gallon of gasoline this week raced by the top price for all of last year and continued to rise overnight.
A gallon rose almost 2 cents to $2.725 to end the work week, according to AAA, Wright Express and Oil Price Information Service. Prices are 96 cents higher than a year ago.
In other Nymex trading in February contracts, heating oil rose 1.14 cents to $2.195 a gallon and gasoline rose 2.77 cents to $2.1626 a gallon. Natural gas futures fell 9 cents to $5.716 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 22 cents to $81.73 a barrel on the ICE Futures exchange. (AP)