Oil prices rise, then give up gains
Oil prices rose above $97 per barrel on Thursday, but then gave up most of their gains in late trading.
The initial run-up in prices was driven by word that the European Central Bank will buy lots of government bonds, which should help lower borrowing costs for European countries struggling with debt expenses. Prices also were boosted by reports showing more private-sector hiring and fewer unemployment claims in the U.S.
Positive economic news tends to boost the price of oil because traders anticipate that stronger economies will need more oil.
Oil prices also were supported by a report from the Energy Information Administration that showed U.S. crude supplies dropped by more than analysts expected last week. Hurricane Isaac interrupted deliveries of oil imports and refinery activity along the Gulf Coast.
Benchmark U.S. crude reached as high as $97.71 per barrel on the New York Mercantile Exchange. However, in late trading, enthusiasm cooled. Oil ended the day at $95.53, up just 17 cents. The price of Brent crude, priced in London, rose 40 cents to end at $113.49.
Gasoline pump prices hovered around a national average $3.82 a gallon, according to AAA, Wright Express and oil Price Information Service.