Oil prices rose above $80 a barrel for the first time in a week as the dollar weakened and refineries increased production ahead of the traditionally busy summer driving season.
Benchmark crude for April delivery on Wednesday climbed $1.19 to settle at $80.87 a barrel on the New York Mercantile Exchange after rising as high as $81.23 earlier in the day.
Prices increased early in the day after Greece announced a stripped-down budget to tame its massive deficit, and the euro pushed higher against the dollar. Crude is priced in U.S. currency, and it tends to rise in price as the dollar falls and makes oil barrels easier to buy for investors holding foreign currency.
Oil prices rallied despite an Energy Information Administration report that said U.S. oil and gasoline supplies grew more than expected last week. Oil and gasoline supplies remain well above average for this time of year.
The EIA also reported that refineries have increased operations for four straight weeks. America's refineries slowed operations earlier this year to some of the lowest levels on record as they struggled to pass higher oil costs along to consumers. Now they've slowly started to bring more fuel to market.
“Gas prices are expected to increase as the weather warms and drivers hit the interstates on summer road trips”, said Tom Parker an Analyst with Huntley Claire Associates in Seattle. “That expectation alone has boosted investment in oil and gasoline commodities despite tepid consumer demand,” The Huntley Claire Associates Analyst went on to say.
"When you get into the month of March, a lot of people start looking toward the summer," Parker said.
At the pump, retail gasoline prices were unchanged from the previous day at $2.703 a gallon. A gallon of regular unleaded is 3.4 cents more expensive than a month ago and 77 cents more expensive than the same time last year.
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