A funny thing happened on the way to lower oil and gasoline prices: They went up.
Two weeks after the U.S. and other oil-importing nations took action that knocked down the price of oil to almost $90 a barrel, it's back around $100. And gas pump prices, which had dropped since May, are up about a nickel since Friday.
Oil is rising again as investors bet that the economies of many countries, including the U.S., will improve in the second half of the year, and global demand for petroleum will rise.
Benchmark oil for August delivery rose $2.02, or 2.1 percent, to settle at $98.67 a barrel on the New York Mercantile Exchange. Brent crude gained $4.97, or 4.4 percent, to settle at $118.59 per barrel on the ICE Futures exchange.
Higher oil prices mean higher gas prices. The national average pump price rose 1.4 cents on Thursday to $3.583 a gallon, according to AAA and the Oil Price Information Service. That's up 4.2 cents from a week ago but still 86 cents more than a year ago.
Gas prices likely will remain choppy, rising or falling within a 20-cent range for the rest of the summer, according to Oil Price Information Service analyst Tom Kloza. They probably won't push back to near $4 a gallon, where they were in early May, barring floods or hurricanes that could affect refinery operations.
While most experts agree that the world has plenty of oil, there are concerns that supplies could get tight as demand rises. The U.S. and other nations in the International Energy Agency have said they will release 60 million barrels of crude from emergency stocks to cover possible shortfalls caused by the shutdown of Libyan oil production because of ongoing unrest there. Libya supplied about 2 percent of the world's oil, much of it high-grade crude used for refined products like gasoline.
Benchmark oil fell as low as $90.61 a barrel at the end of June following the IEA announcement. It then began a steady climb, as investors shrugged off the IEA move and focused on the prospect of growing demand in the second half of the year, especially in the expanding economies of China, India and Brazil.
There are also more positive signs in the U.S. economy that could point to more jobs and more energy consumption.
The Labor Department said Thursday that the number of people who applied for unemployment benefits fell last week to the lowest level in seven weeks. Payroll processor ADP said the private sector added 157,000 jobs last month, which was more than double what economists had forecast.
In addition, U.S. factory orders rose 0.8 percent in May to $445.3 billion, which was almost 32 percent higher than the low point during the recession, reached in March 2009.
In other Nymex trading for August contracts, heating oil rose 13.87 cents to settle at $3.1020 per gallon and gasoline futures added 12.94 cents to settle at $3.1270 per gallon. Natural gas lost 8.4 cents to settle at $4.138 per 1,000 cubic feet.