Oil wavers as jobs report boosts dollar

NEW YORK — Oil prices wavered Friday on fresh evidence the economy was pulling itself out of recession.

Benchmark crude for September delivery increased 35 cents to $72.29 a barrel on the New York Mercantile Exchange. Prices are on track to increase for the fourth straight week.

Energy prices typicially rise with positive economic news. But they’ve been especially volatile this year as traders shrug off traditional supply and demand arguments when placing their investments.

Money has flooded into energy markets even though petroleum supplies have expanded and Americans cut way back on energy consumption. They were searching for a safe place to put their money as the dollar got weaker, and they found it in oil, which doubled in price from January to June.

But a surge in the U.S. Dollar Index this week sent some of that money flowing out of energy commodities. The index measures the dollar against other major currencies.

“The guys who bought crude because of the weak dollar, those are the guys who are getting spanked right now,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

The dollar rallied this week as an industry report showed pending U.S. home sales increased in June for the fifth straight month and the government said consumers increased spending more than expected. The U.S. Dollar Index grew 0.72, or nearly 1 percent to 78.705 in morning trading.

The Labor Department added to the enthusiasm Friday with a report that said the country’s unemployment rate unexpectedly dipped to 9.4 percent, its first decline in 15 months.

Meanwhile, retail gas prices continued to rise. They climbed nearly 2 cents a gallon overnight to a new national average of $2.628 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Gas prices have been on the rise since July 22 are closing in on their summer peak of $2.69 a gallon.

A gallon of regular unleaded is still 3.5 cents cheaper than last month and $1.221 cheaper than a year ago.

In other Nymex trading, gasoline for September delivery fell 1.32 cents to $2.0475 a gallon and heating oil added less than a penny to $1.9434 a gallon. Natural gas for September delivery advanced 3.9 cents to $3.782 per 1,000 cubic feet.

In London, Brent prices gave up 11 cents to $74.72 a barrel on the ICE Futures exchange.

Associated Press writers Pablo Gorondi in Budapest, Alex Kennedy in Singapore and Jeannine Aversa in Washington contributed to this report.