Oil prices rise after year's biggest drop

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Associated Press

Posted on November 8, 2012 at 1:01 PM

Updated Thursday, Nov 8 at 1:32 PM

Oil prices rose above $85 per barrel on Thursday as postelection volatility continued.

Crude oil rose 75 cents to $85.19 in afternoon trading on the New York Mercantile Exchange. That followed a decline of 5 percent on Wednesday, when traders were spooked by worries about budget negotiations in the U.S. Analysts also say that oil supplies and production are high, which tends to drive down prices.

Oil analyst Jim Ritterbusch wrote in a note that he expects this week's price volatility to subside, but there's still a bias toward new lows. The U.S. has large inventories of oil and production is at 17-year highs, he wrote.

AAA said gasoline prices at the pump are up a fraction of a penny to $3.464 per gallon.

In other trading, Brent crude, which is used to price international varieties of oil, rose 42 cents to $107.24 per barrel in London.

In other futures trading in New York:

— Wholesale gasoline rose 1 cent to $2.60 per gallon.

— Heating oil rose a penny to $2.97 per gallon.

— Natural gas was unchanged at $3.72 per 1,000 cubic feet. The government said supplies rose less than analysts had expected, but inventories are still 6.6 percent above the five-year average for this time of year.

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