NEW YORK - Oil prices edged above US$79 a barrel Wednesday as America's crude supply fell for the fourth week in a row.
Gasoline supplies also fell unexpectedly and futures neared a high for the year for January delivery, a contract that closes Thursday.
After weeks of declines, prices at the pump prices appeared to be catching up to crude, which has risen 7.3 per cent since Dec 21.
Pump prices began to tick higher over the weekend and are now on the longest upward streak since October. They jumped another 1.5 cents overnight to a new national average of US$2.623 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Gas is still a penny cheaper than last month, however.
Demand for gasoline is increasing as well. The EIA report said gas demand was 1.1 per cent higher last week than the same time last year, even though a gallon costs about $1 more.
That is partly due to a late surge in buying as people filled up cars and snow blowers before a major storm hit the Northeast this month.
It is typical to see crude draws at this time of year because many companies empty out storage facilities for tax purposes. While supplies have fallen nearly 14 million barrels over the past four weeks, they remain relatively high compared with past years.
Most energy experts discounted oil prices that have risen every day this week because so many traders take the week off for the holiday.
Benchmark crude for February delivery added 41 cents to settle at $79.28 a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery rose 47 cents to $78.11 a barrel on the ICE Futures exchange.
In other Nymex trading, heating oil for January delivery added less than a penny to settle at $2.1093 a gallon, and gasoline for rose 3 cents to settle at $2.0406 a gallon. Natural gas for February delivery gave up 13.1 cents to settle at $5.709 per 1,000 cubic feet.