Energy futures falter on run to $100 a barrel

NEW YORK -- It didn't happen Wednesday, it may not happen today on Thanksgiving, but the price of oil seems destined to burst through the $100 mark sometime soon, leaving higher pump prices and rising heating fuel costs in its wake.

Energy futures balked on that drive Wednesday after the government reported supplies at a key oil terminal in the Midwest rose for the first time in weeks. Analysts said it was a pause, not a retreat for energy futures that reached as high as $99.29 in electronic trading overnight.

"Not exciting enough to get us over the hump just yet," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Overall crude inventories fell, and distillates, including heating oil, dropped more than expected last week, the Energy Department's Energy Information Administration reported.

The mixed report did little to shake the prevailing view that oil supplies will tighten amid rising global demand, particularly from fast-growing economies in China and India.

"It's two steps forward, then one back in terms of this week's inventory cushion," said Tim Evans, an analyst at Citigroup Inc. in New York.

At the pump, gas prices fell 0.1 cent overnight to a national average of $3.089 a gallon, according to AAA and the Oil Price Information Service. Prices have fallen 2.3 cents since last week, and are almost 14 cents below the record price of $3.227 a gallon set in May, a bit of good news for Thanksgiving holiday drivers.

The average price for a gallon in the Chicago area was $3.189, according to AAA.

Gas prices will likely remain flat or fall unless oil reaches $100 a barrel or higher, analysts say.

Light, sweet crude for January delivery fell 74 cents to settle at $97.29 a barrel on the New York Mercantile Exchange.

Before the inventory report, prices rose as high as $99.29 a barrel in electronic trading to break the previous intraday record of $98.62 set earlier this month.

Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.