Oil near $79 a barrel; pump prices ticking up

NEW YORK -- Energy prices flattened Tuesday with a majority of futures traders taking the holiday week off, though a stronger dollar helped keep a barrel of oil below $79.

Benchmark crude for February delivery added 4 cents to $78.81 a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery increased 31 cents to $77.63 a barrel on the ICE Futures exchange.

A rise in the dollar versus other currencies tends to push oil prices lower. Crude barrels are priced in dollars, and investors holding foreign money can't buy as much when the dollar rises.

Still, oil has pressed higher for four straight days. Crude barrels are rising close to the high for the year of $82 a barrel, and that's tugging other fuels higher as well.

Retail gas prices increased for the fourth straight day, the first time it's done that since October. The national average climbed a half penny overnight to a new national average of $2.608, according to auto club AAA, Wright Express and Oil Price Information Service.

A gallon of regular unleaded is 2.1 cents cheaper than a month ago, but nearly $1 more expensive than a year ago.

A report released Tuesday by MasterCard SpendingPulse said Americans bought more gas last week than they did a year ago, marking the fifth straight week that demand strengthened.

When the new year begins, analyst and trader Stephen Schork said he'll be closely watching for signs of gas demand and how oil refiners will react. Petroleum consumption has dropped overall this year in the U.S., and if refiners can't pass along higher crude prices to consumers, then Schork said would expect for a correction in oil prices.

"Refiners have a difficult row to hoe right now," he said. "These guys can't make money. They can't pass on the exaggerated cost of crude to consumers. Some are trying to sell their refineries, and they're not getting any takers.

"But unless you have a massive rally in the dollar, I don't think you'll get the correction in crude oil," Schork said.

In other Nymex trading in January contracts, heating oil rose 2.95 cents to $2.103 gallon while gasoline gave up less than a penny to $2.0136 a gallon. Natural gas fell 11.8 cents to $5.872 per 1,000 cubic feet.